High Frequency Identification of Monetary Non-Neutrality: The Information Effect
We present estimates of monetary non-neutrality based on evidence from high-frequency responses of real interest rates, expected inflation, and expected output growth. Our identifying assumption is that unexpected changes in interest rates in a 30-minute window surrounding scheduled Federal Reserve announcements arise from news about monetary policy. In response to an interest rate hike, nominal and real interest rates increase roughly one-for-one, several years out into the term structure, while the response of expected inflation is small. At the same time, forecasts about output growth also increase—the opposite of what standard models imply about a monetary tightening. To explain these facts, we build a model in which Fed announcements affect beliefs not only about monetary policy but also about other economic fundamentals. Our model implies that these information effects play an important role in the overall causal effect of monetary policy shocks on output.
Rational Ignorance at the Patent Office
It is common to assert that the Patent and Trademark Office does a bad job of examining patents, and that it should spend more time and money weeding out bad patents. In this article, Professor Lemley challenges that conventional wisdom. Using available data regarding the cost and incidence of patent prosecution, litigation, licensing and other uses of patents, he demonstrates that strengthening the examination process is not cost effective. The core insight is that very few patents are actually litigated or licensed; most simply sit on a shelf unused, or are used only for noncontroversial purposes like financing. Because of this, society would be better off spending its resources in a more searching judicial inquiry into validity in those few cases in which it matters than paying for a more protracted examination of all patents ex ante. In economic terms, the patent office is "rationally ignorant" of the objective validity of the patents it issues.
time series decision making reinforcement learning mathematical model decision support system embedded system magnetic resonance magnetic resonance imaging united kingdom breast cancer developing country resonance imaging motion planning confidence interval humanoid robot social science experimental design linear algebra nash equilibrium data assimilation standard deviation black box autoregressive model functional magnetic resonance interest rate exchange rate design of experiments process capability prostate cancer fuzzy environment functional magnetic triangular fuzzy number rate model citizen science scientific publication open-source software choice behavior econometric model programming paradigm ordinary least square business cycle prefrontal cortex tumor cell process capability indice evaluation procedure capability indice risk aversion breast cancer patient hearing impairment mental disorder digital object identifier humanoid robotic demand function federal reserve trade credit aggregate datum sample variance major depressive disorder monetary policy entropy maximization major depressive circulating tumor cell circulating tumor mobile money cross-sectional datum marginal model rejection sampling policy rule cell nucleu financial cost mood disorder interpretation proces real interest rate trust game institutional investor nucleus accumben learning disorder money demand metastatic breast accidental fall positive theory genetic heterogeneity review [publication type] word list by frequency neuritis, autoimmune, experimental projections and prediction occur (action) departure - action job stream value (ethics) exhibits as topic reuse (action) contain (action) cellular targeting null value advance directive - proxy benchmark (computing) collections (publication) coping behavior deny (action) hearing loss, high-frequency revision procedure rem sleep behavior disorder codependency (psychology) pervasive informatic amygdaloid structure sensorineural hearing loss (disorder) norm (social) contingency (philosophy) behaviorial habit choose (action) persistence (computer science) eighty nine neoplasm metastasi columbia (supercomputer) expectation–maximization algorithm relocation of home or business manufactured supply mediator brand of benfluorex hydrochloride public-private sector partnership academia (organization) document completion status - documented entity–relationship model sex characteristic uc browser mike lesser the australian nat friedman lars bak (computer programmer) research support as topic lars gene substance-related disorder expected utility hypothesi fama im economic complexity index metastatic carcinoma conflict (psychology) rule (guideline) kind of quantity - equilibrium john d. wiley baseline (configuration management) transaction counts and value totals - contract contract agreement standards characteristic file spanning ephrin type-b receptor 1, human published comment copy (object) arabic numeral 0 united state