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Many people have helped us during this project in many different ways. We would like to thank Andrew Hauser for his detailed comments and constructive suggestions throughout the project. Rogers as well as two anonymous referees for their comments on the paper. To especially Luca Benati, but also to Alison Stuart, Marion Kohler, and John Power we are(More)
Evidence that cash flow has a significant effect on company investment spending, after controlling for Tobin's average Q, has often been interpreted as suggesting the importance of financing constraints. Recent work on measurement error in the Q model casts doubt on this interpretation. It is possible that the Q model may not be identified if there are(More)
GDP per worker fell for the five years after 2008 which is unprecedented in post war UK history. In this paper we argue that " capital shallowing " (i.e. the fall in the capital-labour ratio) could be the main reason for this. This is likely to have occurred due to changes in factor prices: a large fall in real wages and increases in the cost of capital. In(More)
The views expressed are those of the authors and do not necessarily reflect those of the Bank of England. The authors would like to thank Mervyn King especially for providing the motivation for this paper. We are indebted to the help and assistance of the London School of Economics, and in particular Richard Jackman, in making the experiment possible.(More)
We offer a theory of economic fluctuations based on intertemporal increasing returns: agents who have been active in the past face lower costs of action today. This specification explains the observed persistence in individual and aggregate output fluctuations even in the presence of i.i.d shocks, because individuals respond to the same shock differently(More)
This paper presents techniques to solve for optimal simple monetary policy rules in rational expectations models. Both the pre-commitment and the discretionary solutions are considered. The techniques described are notable for the flexibility they provide over the structure of the policy rule being solved for. Specifically, not all state variables need(More)
A 15-year-old girl died 14 days after hemiplegia suddenly developed. On arteriography, intimal separation of the middle cerebral arteries showed as a long attenuated column of dye--the "string" sign. Pathologic examination showed intimal separation starting at the distal bifurcation of the right internal carotid artery and extending into the middle and(More)