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The reason is that central banks react to variables, such as inflation and the output gap, which are endogenous to monetary policy shocks.
Endogeneity implies a correlation between regressors and the error term, and hence, an asymptotic bias.
In principle, Instrumental Variables IV estimation can solve this endogeneity problem. In practice, IV estimation poses challenges as the validity of potential instruments also depends on other economic relationships.
We argue in favor of OLS estimation of monetary policy rules. To that end, we show analytically in the three-equation New Keynesian model that the asymptotic OLS bias is proportional to the fraction of the variance of regressors accounted for by monetary policy shocks.
Using Monte Carlo simulation, we then show that this relationship also holds in a quantitative model of the U. As monetary policy shocks explain only a small fraction of the variance of regressors typically included in monetary policy rules, the endogeneity bias is small.
Using simulations, we show that, for realistic sample sizes, the OLS estimator of monetary policy parameters outperforms IV estimators.Cross-cultural management is the new challenge to the new age managers. It's not just a Human Resource (HR) issue, but departmental managers are also equally responsible for managing and motivating their respective cross-cultural workforce for getting .
Located in the Columbus, Ohio, neighborhood of Bexley, Capital University is a private, four-year undergraduate institution and graduate school that transforms lives through higher education.
The project entitled” A study on liquidity, profitability and risk with regard to working capital management and inventory management at Milma Cattle feed Plant, Pattanakkad” is done to assess the efficiency in managing the inventory, solvency and liquidity position and profitability of the company.
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Working Capital Management in Healthcare Houma Guy. HCS Health Care Finance September 24, Working Capital Management in Healthcare Working capital is the money required to finance the day to day operations of an organization. Working capital management ensures that a business has an optimum amount of working capital.
Working capital management involves a trade-off between two .