Monetary and Fiscal Theories of the Price Level: The Irreconcilable Differences

The fiscal theory of the price level (FTPL) has attracted muchattention but disagreement remains concerning its defining characteristics.Some writers have emphasized implications regarding interest-ratepegging and determinacy of rational expectations solutions,whereas others have stressed its capacity to generate equilibriain which price-level trajectories mimic those of bonds and differdrastically from those of money supplies. We argue that theFTPL attained prominence precisely because it appeared to providea theory whose implications differ greatly from conventionalmonetary analysis; accordingly we review monetarist writingsto identify the primary distinctions. In addition, we reviewrecent findings concerning learnability—and thereforeplausibility—of competing rational expectations equilibria.These indicate that when FTPL and monetarist equilibria differ,the latter are more plausible in the vast majority of cases.Under Ricardian assumptions, necessary for clear distinctions,theoretical analysis indicates that fiscal and monetary coordinationis not necessary for macroeconomic stability. Footnotes ¹ E-mail addresses: bmccallum{at}cmu.edu; edward.nelson{at}stls.frb.org     

Poverty effects of food price escalation: The importance of substitution effects in Mexican households

Recent food price increases reportedly caused significant numbers of households to fall into poverty, particularly in the developing world. Most research into the welfare effects of these food price changes assumes constant demand or approximates second order substitution effects. Poverty forecasts with these assumptions may overestimate or underestimate the effect of food price increases in a nation where most households consume diverse food baskets. We account for full substitution by calculating a theoretically consistent food demand system, accounting for household responses to food price changes by decreasing some food purchases and increasing other food purchases. We use Mexican data to confirm the mitigation of adverse welfare effects from food price increases after accounting for country-specific dietary preferences in modeling demand. In comparison to previous literature, our welfare measures predict theoretically consistent numbers of Mexican households entering poverty due to recent food price changes.     

Drivers of COVID-19 vaccinations: vaccine delivery and delivery efficiency in the United States

NETNOMICS: Economic Research and Electronic Networking - This paper adds some formal research to the success of ongoing efforts to combat the COVID-19 pandemic by examining the drivers of the...     

Rejoinder to Paul Krugman

We provide a brief rejoinder to Krugman [2008, Response to Nelson and Schwartz. Journal of Monetary Economics 55, this issue] on three issues that are central to his original New York Review of Books article and his reply to our setting the record straight: (i) criticisms of Friedman; (ii) criticisms of monetarism; and (iii) interpretations of history.     

Understanding spot and forward exchange rate regressions

Using the Kalman filter, we obtain maximum likelihood estimates of a permanent–transitory components model for log spot and forward dollar prices of the pound, the franc, and the yen. This simple parametric model is useful in understanding why the forward rate may be an unbiased predictor of the future spot rate even though an increase in the forward premium predicts a dollar appreciation. Our estimates of the expected excess return on short-term dollar-denominated assets are persistent and reasonable in magnitude. They also exhibit sign fluctuations and negative covariance with the estimated expected depreciation. © 1997 John Wiley & Sons, Ltd.     

Developing Persuasion Knowledge by Teaching Advertising Literacy in Primary School

As part of a larger project to integrate advertising literacy into school curriculum, this research evaluates the effectiveness of an initial three-hour advertising literacy classroom intervention among eight- and nine-year-olds. The field experiment (a pretest/posttest, control/experimental group design) was implemented in 10 third grade classes in a three-week time period in three high-poverty schools in the United States. Low advertising literacy occurred at baseline. Evaluation results indicated significant increases in intervention students' understanding of the message creator, the selling intent, persuasive strategy, and target audience. Recommendations for curriculum development, refinement, and implementation for a wider audience are discussed.     

Economic burden of sarcoidosis in a commercially-insured population in the United States

Background: Sarcoidosis is a multi-system inflammatory disorder characterized by the presence of non-caseating granulomas in involved organs. Patients with sarcoidosis have a reduced quality-of-life and are at an increased risk for several comorbidities. Little is known about the direct and indirect cost of sarcoidosis following the initial diagnosis.

Aims: To provide an estimate of the healthcare resource utilization (HCRU) and costs borne by commercial payers for sarcoidosis patients in the US.

Methods: Patients with a first diagnosis of sarcoidosis between January 1, 1998 and March 31, 2015 (“index date”) were selected from a de-identified privately-insured administrative claims database. Sarcoidosis patients were required to have continuous health plan enrollment 12 months prior to and following their index dates. Propensity-score (1:1) matching of sarcoidosis patients with non-sarcoidosis controls was carried out based on a logistic regression of baseline characteristics. Burden of HCRU and work loss (disability days and medically-related absenteeism) were compared between the matched groups over the 12-month period following the index date (“outcome period”).

Results: A total of 7,119 sarcoidosis patients who met the selection criteria were matched with a control. Overall, commercial payers incurred $19,714 in mean total annual healthcare costs per sarcoidosis patient. The principle cost drivers were outpatient visits ($9,050 2015 USD, 46%) and inpatient admissions ($6,398, 32%). Relative to controls, sarcoidosis patients had $5,190 (36%) higher total healthcare costs ($19,714 vs $14,524; p?p?p?Background: Sarcoidosis is a multi-system inflammatory disorder characterized by the presence of non-caseating granulomas in involved organs. Patients with sarcoidosis have a reduced quality-of-life and are at an increased risk for several comorbidities. Little is known about the direct and indirect cost of sarcoidosis following the initial diagnosis.

Aims: To provide an estimate of the healthcare resource utilization (HCRU) and costs borne by commercial payers for sarcoidosis patients in the US.

Methods: Patients with a first diagnosis of sarcoidosis between January 1, 1998 and March 31, 2015 (“index date”) were selected from a de-identified privately-insured administrative claims database. Sarcoidosis patients were required to have continuous health plan enrollment 12 months prior to and following their index dates. Propensity-score (1:1) matching of sarcoidosis patients with non-sarcoidosis controls was carried out based on a logistic regression of baseline characteristics. Burden of HCRU and work loss (disability days and medically-related absenteeism) were compared between the matched groups over the 12-month period following the index date (“outcome period”).

Results: A total of 7,119 sarcoidosis patients who met the selection criteria were matched with a control. Overall, commercial payers incurred $19,714 in mean total annual healthcare costs per sarcoidosis patient. The principle cost drivers were outpatient visits ($9,050 2015 USD, 46%) and inpatient admissions ($6,398, 32%). Relative to controls, sarcoidosis patients had $5,190 (36%) higher total healthcare costs ($19,714 vs $14,524; p?<?0.001). Sarcoidosis patients also had significantly more work loss days (15.9 vs 11.3; p?<?0.001) and work loss costs ($3,288 vs $2,527; p?<?0.001) than matched controls. Sarcoidosis imposes an estimated total direct medical cost of $1.3–$8.7 billion to commercial payers, and an indirect cost of $0.2–$1.5 billion to commercial payers in work loss.

Conclusions: Sarcoidosis imposes a significant economic burden to payers in the first year following diagnosis.