This paper examines the effectiveness of the negative interest rate policy conducted by several central banks to stabilize economic growth and in ation expectations through the signaling channel. In doing so, we assess survey-based expectations data for up to 44 economies from 2002 to 2017 and analyze the impact of the adoption of a negative interest rate policy on expectations made by professionals based on a difference-in-differences approach. Our main findings are as follows: First, we show that the introduction of negative policy rates signi ficantly reduces expectations regarding 3-month money market interest rates and also 10-year government bond yields. Second, we also provide evidence for a significantly positive effect of this unconventional monetary policy tool on GDP growth and in ation expectations. This implies that the negative interest rate policy appears to be effective in boosting economic growth and overcoming a de- ationary spiral. Consequently, the effect of negative nominal interest rates on real interest rate expectations is also negative.
Fil: Quintana Aguilar, Gand Derry. Universidad de San Andrés. Departamento de Economía; Argentina. ; A raíz de la crisis financiera del año 2008, varios bancos centrales fijaron sus tasas de política monetaria por debajo de cero. Para junio de 2016, aproximadamente un tercio de los bonos de gobierno con grado de inversión en el mundo cotizaban a rendimientos nominales negativos. En este documento, evalúo la optimalidad de dicha política monetaria para una economía Cash-In-Advance añadiendo un límite superior exógeno a las tenencias de dinero fiduciario. Para dicho propósito, es útil tener en cuenta que el supuesto de cota superior está relacionado con la cantidad máxima de depósitos asegurados en el sistema financiero. En última instancia, encuentro que, en algunos casos, las tasas de interés nominales negativas pueden ser óptimas en un contexto de equilibrio general, dada la solución de "segundo mejor" implementada en un plan de Ramsey. ; In the wake of the 2008 financial crisis, several central banks set their monetary policy rates below zero. By June 2016, approximately one-third of investmentgrade government bonds in the world traded at nominal negative yields. In this paper, I assess the optimality of such monetary policy for a cash-in-advance economy with an exogenous upper bound to fiat money holdings. For our purposes, it is helpful to note that my assumptions are related to the maximum amount of insured deposits. Ultimately, I find that, in some cases, negative nominal interest rates can be optimal in a general equilibrium, given the second-best solution implemented in a Ramsey plan. ; Kawamura, Enrique
Developmental patterns strongly influence spike fertility and grain number, which are primarily determined during the stem elongation period (i.e. time between terminal spikelet phase and anthesis). It has been proposed that the length of the stem elongation phase may, to an extent, affect grain number; thus it would be beneficial to identify genetic variation for the duration of this phase in elite germplasm. Variation in these developmental patterns was studied using 27 elite wheat lines in four experiments across three growing seasons. The results showed that the length of the stem elongation phase was (i) only slightly related to the period from seedling emergence to terminal spikelet, and (ii) more relevant than it for determining time to anthesis. Thus, phenological phases were largely independent and any particular time to anthesis may be reached with different combinations of component phases. Yield components were largely explained by fruiting efficiency of the elite lines used: the relationships were strongly positive and strongly negative with grain number and with grain weight, respectively. Although fruiting efficiency showed a positive trend with the duration of stem elongation that was not significant, a boundary function (which was highly significant) suggests that the length of this phase may impose an upper threshold for fruiting efficiency and grain number, and that maximum values of fruiting efficiency may require a relatively long stem elongation phase. ; This work was supported by the Sustainable Modernization of Traditional Agriculture (MasAgro) initiative from the Secretariat of Agriculture, Livestock, Rural Development, Fisheries and Food (SAGARPA), the European Union's Seventh Framework Programme (FP7/2007–2013) under the grant agreement no. 289842 ADAPTAWHEAT, and by the National Council on Science and Technology (CONACYT) scholarship 310626 to O.E.G.N. Authors acknowledge CIMMYT's Wheat Physiology group for technical assistance with measurements and trial management.
Understanding the influence of row spacing and plant density on grain yield and yield components of crambe is critical in order to obtain higher grain yields. Therefore, the objective of this study was to evaluate the effects of row spacing and plant density on grain yield and its components in crambe in two distinct regions of Brazil (Marechal Candido Rondon-PR, MCR-PR, and Botucatu-SP, BTU-SP). Narrow and wide row spacing (0.20 and 0.40 m) combined with four plant densities (15, 25, 35, and 45 plants m-1) were evaluated in a randomized block layout with four replications in a 2 × 4 factorial design. The experiment at BTU-SP was run under rainfed conditions with supplementary irrigation, whereas the experiment at MCR-PR was run under rainfed conditions without supplementary irrigation. Both experiments were run in soils classified as Oxisols. There was no interaction between row spacing and plant density. Highest grain yield with supplementary irrigation was observed at 0.20 m row spacing. Without irrigation, row spacing did not affect grain yield owing to the plasticity of crop. The highest grain yield was observed with approximately 30 plants m-1 at both experimental locations. A strong negative correlation was observed between final plant population and number of grains per plant. There was high plant mortality, particularly at high plant densities cultivated under irrigation. Higher mortality occurred because of high intraspecific competition and a larger disease incidence due to the higher humidity in the irrigated experiment. A mechanism of self-adjustment by plant density was observed in crambe, with its intensity dependent on plant density and environmental conditions, such as water and nutrient availability and light incidence.
Abstract Farmers' perceptions of climate variability is compared with the sensitivity of observed yields for wheat, maize, soybean, and sunflower crops to interannual and intra-annual climate variability in two districts (Junín and San Justo) in central Argentina from the 1970s. A recent transition occurred here between mixed crop and livestock farming to a more specialized system, dominated by transgenic soybean combined with glyphosate. According to the ethnographic fieldwork, farmers ranked drought first and flood second as the main adverse climate factors in both districts. Overall, the farmers' representations fit rather well with the observed relationships between interannual variability of yields and rainfall, especially in Junín. The adverse impact of long-lasting dry spells, especially during the first half of the crop cycle, is usually combined with the more linear impact of large rainfall amounts (anomalously positive/negative rainfall amounts associated with anomalously positive/negative yields) during the second half of the crop cycle. This relationship is strong for soybeans, similarly large for maize, far weaker for wheat, and reversed for sunflower, which is the only crop that benefits, on average, from anomalously low rainfall amounts at a specific stage of the crop cycle. The adverse effect of flood on soybeans and maize seems less phase-locked and more diluted across the crop cycle. This paper presents the argument that climate and society have a complex relationship, requiring an integrated analysis of the social context, people's perceptions of climate, and scientific climate knowledge. The concept of "climate social significance" is proposed in order to highlight the strategies implemented by different socioproductive groups to address adverse climate events.
While the current European Central Bank deposit rate and 2-year German government bond yields are negative, the U.S. 2-year government bond and deposit rates are positive. Insights from Prospect Theory suggest that this situation may lead to an excess flow of funds into the United States. Yet the environment of negative interest rates is different from the environment considered in Prospect Theory and subsequent literature, since decisions are framed in terms of rates of return rather than absolute amounts and the task involves the allocation of funds rather than a choice or a pricing task as is often used in the literature. Moreover, parking money in the United States as a foreign investor may lead to a mixed lottery due to exchange rate risk, while the literature mostly studies non-mixed lotteries. We therefore explore investors' behavior in a mixed-return lottery, using a series of lab experiments where the task is to allocate money between two portfolios with either a sure return or a risky return. We use a between-subject design such that, while the investment decisions are the same, those in the negative frame allocate funds between a sure negative return and a lottery, and those in the positive frame allocate funds between a sure positive return and a lottery. Surprisingly, we find no framing effect on investment, a result that holds for a large range of stakes, no matter whether the money to invest is literally on the table, regardless of the language used to describe the problem (abstract or not), and no matter whether the lottery is a two-state or a three-state lottery. We find that this result is not driven by whether the task is continuous rather than discrete or because the risky portfolio is a mixed lottery. Not only do we find no effect of the frame on the investment decision, we also find no evidence of risk-seeking in the loss domain, and that the behavior is mostly risk-neutral.
Die Inhalte der verlinkten Blogs und Blog Beiträge unterliegen in vielen Fällen keiner redaktionellen Kontrolle.
Warnung zur Verfügbarkeit
Eine dauerhafte Verfügbarkeit ist nicht garantiert und liegt vollumfänglich in den Händen der Herausgeber:innen. Bitte erstellen Sie sich selbständig eine Kopie falls Sie diese Quelle zitieren möchten.
There's been a lot of talk about "yield curve control" (YCC) as of late. I found the recent exchange between Joe Weisenthal and David Beckworth (with many others chiming in) very interesting:I normally enjoy Joe's hot takes, but this one... yikes. It is a good example, in my view, of why relying too heavily on the "money view" (i.e.liquidity preference view) of interest rates can cause one to miss the forest for the trees. Let me explain...1/n https://t.co/EjUltLb4dF— David Beckworth (@DavidBeckworth) August 9, 2020
A number of us gathered on Zoom to discuss the subject. What follows is my own take on YCC and some of the issues involved. If you're interested in joining in on a future Zoom discussion, let me know. One thing I learned from the people I talked to is that my notion of YCC seemed to differ from the way they were thinking about it. Most people seem to have in mind the idea of YCC as a form of interest-rate peg, only with the fixed peg applying to interest rates at all maturities, for example, in the manner of Fed policy over the period 1942-47 and 1948-51.In contrast, I view YCC as a state-contingent policy that pegs (or sets a narrow corridor for) rates at all maturities. The slope of the curve may be held fixed, with policy determining the level shifts in the yield curve (so, basically an extension of the Taylor rule applied to interest rates at all maturities). Or policy could also change the shape of the curve, making it steeper or flatter (so, basically replicating "Operation Twist" type interventions). Let me distinguish this notion of YCC by labeling it RBYCC (rule-based YCC).What is the rationale for RBYCC? The RB part has the standard rationale. But what's the point of YCC then? The way I look at things is as follows. For some odd reason, the Treasury finances the deficit by issuing U.S. Treasury Securities (USTs) with different maturities. These securities are nominally risk-free. But if they all constitute risk-free claims to cash (reserves), then why do/should these objects sell at different prices? And even if there is some "preferred habit" force at work, why doesn't the treasury exploit the apparent arbitrage opportunity, selling securities that trade at a premium (typically bills) and repurchasing securities that trade at a discount (typically bonds). Indeed, why even issue securities that the market discounts (a polite way of saying hates) in the first place? (I offer one rationale here: Maturity Structure and Liquidity Risk).If by "liquidity" we mean the ability to convert a security in reserves (or bills), then it is clear that the liquidity of USTs is a policy choice. It would be a simple matter for the Fed and/or Treasury to set up a standing facility prepared to buy/sell USTs of any maturity on par with reserves, for example. This policy would have the effect of eliminating discounts across all securities. If you don't like this policy, then you'll have to explain why it's a good idea for government securities to trade at discounts relative to each other. To me, this is like saying a $10 bill should be discounted relative to two $5 bills. (Note: I am not saying such an argument does not exist--indeed, my paper above makes one such argument.)The effect of RBYCC would be to render all USTs equivalent to reserves (which itself leads to the question of why deficits can't be financed entirely with interest-bearing reserves). The same would be true of YCC with a fixed pattern of discounts, as in the U.S. from 1942-47. This much was recognized by Friedman and Schwartz in their Monetary History when they wrote "The support program converted all securities into the equivalent of money" (pg. 563). In theory, this type of policy should work as well or better than simply targeting the short rate. It eliminates the liquidity premia on government debt (i.e., it satiates liquidity demand) and it permits the usual sort of Taylor rule to stabilize the economy.As mentioned above, however, most people probably think of YCC as a peg-like policy. One argument against interest rate pegs is that they induce instability. The U.S. experience over 1942-47 and 1948-51 is widely interpreted as having promoted excess inflationary pressure. Let me briefly review those episodes here. At the time, the Fed set the short rate at 3/8% and capped a long rate at 2.5%. Measured inflation remained low, thanks to wartime wage and price controls. Interestingly, the 2.5% cap seemed non-binding. It is likely that long yields remained low because investors expected the Fed to keep the short rate low for the indefinite future. We know that at the time, investors were selling bills to the Fed and acquiring higher-yielding bonds to exploit the apparent arbitrage opportunity (see Chaurushiya and Kuttner, 2004). Inflation only took off once wage and price controls were lifted in 1946. While this burst of inflation was likely only temporary, a concern over inflation led the Fed to raise the short rate to 1% in late 1947 when inflation had already declined from 20% to 10%. Inflation then stabilized for about a year at 8%, before declining sharply to 2.75% in 1948. At this time, the economy went into a recession, lasting until the last quarter of 1949. The inflation rate fell below zero in May 1949 and stayed below zero until July 1950 (so, well over a year of deflation). Let me summarize this episode. Under this YCC policy, inflation fell from a peak of 20% in March of 1947 to about 10% in November of 1947 with the bill rate still pegged at 3/8%. Then, with the rate hike pegged at 1%, inflation continued to fall rapidly, hitting a low of negative 3% in August of 1949 (near the end of the recession). It took until June 1950 for inflation to rise to 0%. Inflation then began to rise rapidly after June 1950 – the month the United States entered the Korean War. The Treasury wanted to keep interest rates low to facilitate war finance. The Fed favored high interest rates to combat inflationary pressures created by the war. Inflation peaked in early 1951 at 9.5%. Chaurushiya and Kuttner, 2004 write:"It became abundantly clear during this period that the interest rate caps were hampering the Fed's ability to achieve its monetary policy objectives and, in particular, its efforts to contain rapidly rising inflationary pressures."This experiment in YCC ended with the Treasury Accord in March 1951. And the narrative that YCC is is inconsistent with inflation control was born.My own interpretation of these events and of the efficacy of YCC is as follows. First, it seems a bit of stretch to "blame" inflation over this episode as the consequence of YCC. For most of the 1942-51 period, the U.S. was at or recovering from war. Wars are known to place great fiscal strain on governments and financing a war effort with higher-than-normal inflation is likely desirable from the perspective of optimal public finance policy. That is, the U.S. would have likely experienced higher-than-normal inflation under any reasonable interest rate policy. I interpret the interest rate hike in 1947 as an example of how RBYCC can work to control inflation. In this example, the short rate was increased to 1% and the long-rate remained capped at 2.5%, in effect flattening the yield curve. The disinflationary impact of this rate hike seems evident in the data above. So, it seems clear that RBYCC can be used to control inflation, even if it seems to have been employed rather clumsily in 1947. As usual, looking forward to your comments/criticisms, which can be left below.
In April 2013, the Bank of Japan (BOJ) introduced an inflation target of 2% with the aim of overcoming deflation and achieving sustainable economic growth. But due to lower international oil prices, it was unable to achieve this target and was forced to take further measures. Hence, in February 2016, the BOJ adopted a negative interest rate policy by massively increasing the money supply through purchasing long-term Japanese government bonds (JGB). The BOJ had previously purchased short-term government bonds mainly, a policy that flattened the yield curve of JGBs. On the one hand, banks reduced the numbers of government bonds because short-term bond yields had become negative, and even the interest rates of long-term government bonds up to 15 years became negative. On the other hand, bank loans to the corporate sector did not increase due to the Japanese economy's vertical investment-saving (IS) curve. This paper firstly explains why, in the view of the authors, the BOJ has to reduce its 2% inflation target in the present low oil price era. Secondly, it argues that Japan cannot make a sustainable recovery from its long-lasting recession and tackle its long-standing deflation problem by means of its current monetary policy and its negative interest rate policy in particular. It is of key importance to make the IS curve downward sloping rather than vertical. That means the rate of return on investment must be positive and companies must be willing to invest if interest rates are set too low. Japan's long-term recession is due to structural problems that cannot be solved by its current monetary policy. The last section reports our simulation results of tackling Japan's aging population by introducing a productivity-based wage rate and postponement of the retirement age, which will help the recovery of the Japanese economy.
This note presents a refined local approximation for the logarithm of the ratio between the negative multinomial probability mass function and a multivariate normal density, both having the same mean–covariance structure. This approximation, which is derived using Stirling's formula and a meticulous treatment of Taylor expansions, yields an upper bound on the Hellinger distance between the jittered negative multinomial distribution and the corresponding multivariate normal distribution. Upper bounds on the Le Cam distance between negative multinomial and multivariate normal experiments ensue.
We show that negative monetary policy rates induce systemic banks to reach‐for‐yield. For identification, we exploit the introduction of negative deposit rates by the European Central Bank in June 2014 and a novel securities register for the 26 largest euro area banking groups. Banks with more customer deposits are negatively affected by negative rates, as they do not pass negative rates to retail customers, in turn investing more in securities, especially in those yielding higher returns. Effects are stronger for less capitalized banks, private‐sector (financial and nonfinancial) securities and dollar‐denominated securities. Affected banks also take higher risk in loans. ; This project has received funding from the European Research Council (ERC) under the European Union's Horizon 2020 research and innovation programme (grant agreement No 648398). Peydró also acknowledges financial support from the PGC2018‐102133‐B‐I00 (MCIU/AEI/FEDER, UE) grant and the Spanish Ministry of Economy and Competitiveness, through the Severo Ochoa Programme for Centres of Excellence in R&D (SEV‐2015‐0563). The views expressed do not necessarily reflect those of the European Central Bank, Deutsche Bundesbank, or the Eurosystem.
The Indonesia government conducts several fiscal strategies to solve Revenue and Expenditure Budget (APBN)'s deficit due to corona pandemic by relaxation of APBN's deficit policy, using surplus balance, upsizing loan and bond in domestic and valas currency. Upsizing or issuance a new Indonesian bon called SUN, would increase cost of rate is paid by government and its maturity that impacted to yield curve and risk of SUN. It has inspired this research to (1) investigate the determinant of yield curve due to shocks that occur in Indonesian macroeconomic during the pandemic (2) the impact of the pandemic on SUN's risk and (3) the forecast of the yield curve in SUN after the pandemic using the VAR / VECM method. The reasearch used secondary data of bond yield from Indonesian Stock Market and imposed the effect of such as inflation, BI Rate, Kurs and foreign exchange that is taken from several sources such as BPS, Central Bank of Indonesia and Bloomberg during 2015 January until 2020 May. This research proves that the five main macroeconomic indicators have an influence in the short and long term on the yield curve. YIELD, GDP and BIR variables have a significant negative effect in the short term on the yield curve, whereas CPI, KURS and CD have no significant effect. The ECT's coefficient shows the speed of adjustment towards the long-term balance and the BI Rate adjustment is faster than other variables with an ECT coefficient of 0,33. The estimation results show that the average R-squared is above 55 percent with the highest value of 79,35 percent, this indicates that the equation was formed because the research variables amounted to the R-squared results.
