Monetary policy regimes and the term structure of interest rates

US monetary policy is investigated using a regime-switching no-arbitrage term structure model that relies on inflation, output, and the short interest rate as factors. The model is complemented with a set of assumptions that allow the dynamics of the private sector to be separated from monetary policy. The monetary policy regimes cannot be estimated if the yield curve is ignored during estimation. Counterfactual analysis evaluates importance of regimes in policy and shocks for the great moderation. The low-volatility regime of exogenous shocks plays an important role. Monetary policy contributes by trading off asymmetric responses of output and inflation under different regimes.     

Channels of redistribution: Inequality and poverty in the Russian transition

Contrary to popular perception, Russia entered the transition with significant inequality. Using the large Russian Longitudinal Monitoring Survey dataset, we demonstrate that inequality has subsequently risen yet further and by end-1996 was roughly comparable to inequality in Mexico, Colombia or Malaysia. Driving this increase has been not only wealth transfers through privatization but also changes in government expenditure and a sharp growth in earnings dispersion. There has been a large, associated shift in the structure of income. The paper also looks at the incidence and depth of poverty over the period 1992-96. At the start of transition, roughly half the population of households fell below the poverty line. While this has subsequently declined, at end-1996 nearly 40 per cent of households were below the poverty line and a substantial stratum of households were locked in chronic poverty.     

Do liquidity measures measure liquidity?

Given the key role of liquidity in finance research, identifying high quality proxies based on daily (as opposed to intraday) data would permit liquidity to be studied over relatively long timeframes and across many countries. Using new measures and widely employed measures in the literature, we run horseraces of annual and monthly estimates of each measure against liquidity benchmarks. Our benchmarks are effective spread, realized spread, and price impact based on both Trade and Quote (TAQ) and Rule 605 data. We find that the new effective/realized spread measures win the majority of horseraces, while the Amihud [2002. Illiquidity and stock returns: cross-section and time-series effects. Journal of Financial Markets 5, 31–56] measure does well measuring price impact.     

Punishment Motives for Small and Big Lies

Corporate fraud typically involves deceptive financial statements that are harmful for some stakeholders. We analyze how preferences for honesty and economic fairness shape the punishment of such untruthful statements. Our laboratory experiment disentangles the crucial confound that, for deceptive financial statements, larger deviations from the truth imply both a stronger violation of the honesty norm and an increase in economic harm. Our study measures how people punish increased dishonesty controlling for the corresponding economic harm. We find that punishment increases with the size of the lie. This behavioral pattern is driven by people who are honest themselves. Our results suggest that popular demand for punitive measures in case of financial scandals reflects a genuine interest in the enforcement of social norms.     

No-arbitrage macroeconomic determinants of the yield curve

No-arbitrage macro-finance models use variance decompositions to gauge the extent of association between the macro variables and yields. We show that results generated by this approach are sensitive to the order of variables in the recursive identification scheme. In a four-factor model, one may obtain 18 different sets of answers out of 24 possible. We propose an alternative measure that is based on levels of macro variables as opposed to shocks. We account for the correlation between the macro and latent factors via projection of the latter onto the former. As a result, the association between macro variables and yields can be computed uniquely via an R²$R^2$. Macro variables explain 80% of the variation in the short rate and 50% of the slope, and 54% to 68% of the term premia.     

Household Strategies of Coping with Shocks in Post-crisis Russia

The paper looks at the subjective evaluations of a number of coping strategies that respondents undertook to mitigate the effect on their welfare of the Russian financial crisis. Given the dramatic drop in formal cash incomes, how are people able to adapt? What are the relative importance and effectiveness of coping strategies to resist hardship in reducing poverty for different groups of households? The results of the analysis indicate that the choices of survival strategies are determined by the level of human capital in the household. The higher the household human capital, the more likely the household is to choose active strategies. Households with low human capital, households headed by pensioners, and low‐educated households are more likely to be socially excluded. A specific set of policy interventions should be targeted on such households to avoid the entrenchment of poverty, and the trend toward marginalization and impoverishment of these groups should be expressly monitored.     

Has Rural Infrastructure Rehabilitation in Georgia Helped the Poor?

This article proposes a research strategy to deal with the scarcityof data on beneficiaries for conducting impact assessments ofcommunity-level projects. Community-level panel data from aregular household survey augmented with a special communitymodule are used to measure the impact of projects. Propensityscore–matched difference-in-difference comparisons areused to control for time-invariant unobservable factors. Thismethodology takes into consideration the purposeful placementof projects and their interactions at the community level. Thisempirical approach is applied to infrastructure rehabilitationprojects—for schools, roads, and water supply systems—inrural Georgia between 1998 and 2001. The analysis produces plausibleresults regarding the size of welfare gains from a particularproject at the village level and allows for differentiationof benefits between the poor and the nonpoor. The findings ofthis study can contribute to evaluations of the impact of infrastructureinterventions on poverty by bringing new empirical evidenceto bear on the welfare and equity implications.     

Out of control little-used clinical assets are draining healthcare budgets

To improve utilization and reduce the cost of maintaining mobile clinical equipment, healthcare organization leaders should do the following: Select an initial asset group to target. Conduct a physical inventory. Evaluate the organization's asset "ecosystem." Optimize workflow processes. Phase in new processes, and phase out inventory. Devote time to change management. Develop a replacement strategy.