SHORT‐MATURITY OPTIONS AND JUMP MEMORY

We investigate jump memory using an extensive database of short‐term S&P 500 index options. Jump memory refers to the attenuation of the implied jump intensity and magnitude parameters following a crash event. We use a genetic algorithm to obtain a time series of implied parameter estimates and posit behavioral and rational explanations for parameter attenuation following a crash event. We find that a nested form of the jump‐diffusion model sharpens the remaining parameter estimates and has a negligible effect on pricing accuracy.     

The impact of Milton Friedman on modern monetary economics: Setting the record straight on Paul Krugman's “Who was Milton Friedman?”

Paul Krugman's essay “Who Was Milton Friedman?” seriously mischaracterizes Friedman's economics and his legacy. In this paper, we provide a rejoinder to Krugman on these issues. In the course of setting the record straight, we provide a self-contained guide to Milton Friedman's impact on modern monetary economics and on today's central banks. We also refute the conclusions that Krugman draws about monetary policy from the experiences of the United States in the 1930s and of Japan in the 1990s.     

PRODUCTIVE RECESSIONS AND JOBLESS RECOVERIES

We explore international variation in business cycle dynamics to gain insights into the recent pattern of robust productivity growth during downturns (productive recessions) and weak employment growth during recoveries (jobless recoveries) seen in some advanced economies. We find that sectoral change is associated with productive recessions but that labor market rigidity can impede reallocation and reduce the probability of a productive recession. We also find evidence of a link between productive recessions and jobless recoveries and that recessions dominated by reductions to employment, rather than changes in average employee hours, are more likely to be associated with jobless recoveries. (JELF44, E32)     

Towards the implementation of the European Water Framework Directive?: Lessons learned from water quality simulations in an agricultural watershed

The main objective of the European Water Framework Directive (WFD) is the achievement of a good ecological and chemical status of the water environment (water bodies). This status corresponds to the limit value of Germany's Working Group of the Federal States on Water Problems Issues (LAWA) for water quality class II (3 mg/l total nitrogen). The rivers in the intensively cropped Upper Ems River basin (northwestern Germany) show total nitrogen concentrations in excess of 5–10 mg/l. Hence, the objective of our study was to find a land use and land management scenario that would reduce the total nitrogen concentration to meet the WFD requirements for good ecological and chemical status. We developed consecutive land use and management scenarios on the basis of policy instruments such as the support of agro-environmental measures by Common Agricultural Policy and regional landscape development programs. The model simulations were done by using the Soil and Water Assessment Tool (SWAT). Results of SWAT scenario calculations showed that drastic measures, which are unrealistic from a socio-economic point of view, would be needed to achieve the water quality target in the basin (reduction of arable land from 77.2% to 46% [13% organic farming], increase of pasture from 4% to 15%, afforestation from 10% to 21%, increase of protected wetlands from 0% to 9%, etc.). The example shows additionally that the achievement of the WFD targets is only possible with a consideration of regional landscape and land use distinctions. A related problem yet to be addressed is the general lack of measured water quality data with which to calibrate and validate water quality models such as SWAT. This adds considerable uncertainty to already complicated and uncertainty situations. Thus, improved strategies for water quality monitoring, and data accessibility must be established.     

Diagnose Mammakarzinom

Zusammenfassung  Früh erkannt, ist Brustkrebs fast immer heilbar — 57.000 Frauen in Deutschland werden j?hrlich mit der Diagnose Brustkrebs konfrontiert, 18.000 Betroffene sterben jedes Jahr daran. Mammografie-Screening ist derzeit die einzige fl?chendeckend durchführbare Methode, die die Brustkrebssterblichkeit bei Frauen nach den Wechseljahren nachweislich senken kann. Welche Vorteile und Risiken bietet das Screeningverfahren?