David B. Gordon

Rules, Discretion and Reputation in a Model of Monetary Policy

In a discretionary regime the monetary authority can print more money and create more inflation than people expect. But, although these inflation surprises can have some benefits, they cannot arise systematically in equilibrium when people understand the policymakers incentives and form their expectations accordingly. Because the policymaker has the power to create inflation shocks ex post, the equilibrium growth rates of money and prices turn out to be higher than otherwise. Therefore, enforced commitments (rules) for monetary behavior can improve matters. Given the repeated interaction between the policymaker and the private agents, it is possible that reputational forces can substitute for formal rules.Here, we develop an example of a reputational equilibrium where the out-comes turn out to be weighted averages of those from discretion and those from the ideal rule. In particular, the rates of inflation and monetary growth look more like those under discretion when the discount rate is high.

The dynamic impacts of monetary policy: an exercise in tentative identification

It is currently popular to identify monetary policy shocks with innovations in some measure of reserves or in the federal funds rate. These assumptions about the interest elasticity of the supply of or demand for reserves imply monetary policy shocks that produce dynamic responses of macroeconomic variables that are anomalous relative to traditional monetary analyses. This paper tentatively identifies supply and demand shocks in the markets for reserves and M2 for the 1980s and contrasts them with results for the 1970s. In the later period, identified monetary policy shocks have dynamic impacts that are fully consistent with traditional analyses.

Trends in Velocity and Policy Expectations

An intake port of a diesel engine comprises a straight part, a winding part and a cylindrical part. A connecting port connecting the winding part with the cylindrical part is formed at a height H from the roof of the combustion chamber. H=Rtx alpha xtan theta , where Rt=radius of cylindrical part, alpha =angle subtended by the flowrate gravity center position and optimum inflow position of the connecting port at the center of the cylindrical part, theta =aspirated air descending angle in winding part. Due to this height setting, both swirl intensification and volume efficiency improvement are achieved.