One of the most frequently studied puzzles in international monetary economics is the failure of standard linear monetary models of exchange rates to forecast variations in the exchange rates in the short run. Ever since Meese and Rogoff’s (1983) work on out-of-sample forecast comparison of varieties of monetary models of exchange rates and naïve random walk model, a consensus view has emerged that monetary models are largely unsuccessful in forecasting exchange rates, at least in the short term. This literature casts doubts about the suitability of economic models based on fundamentals in forecasting exchange rates (see Cheung and Chinn, 2001, or Marsh, Cheung and Chinn, 2004) for evidence based on surveys).
In 2003, the Legislature amended the Insurance Act (the Act) to include a requirement in section 289.1 that the Superintendent of Financial Services undertake a review of Part VI of the Act and any Regulations made under Part VI at least once every five years or more often if requested by the Minister of Finance. The Superintendent is to report back with recommendations to improve the effectiveness and administration of Part VI of the Act and the Regulations. Part VI of the Act and the Regulations includes statutory accident benefits, court proceedings and dispute resolution.
The Financial Services Commission of Ontario (FSCO) embarked on a stakeholder consultation process in the second half of 2008 to support the auto insurance review process. In addition, FSCO regularly hears from stakeholders on numerous issues. The opinions expressed by stakeholders represent a broad range of experiences and perspectives. Many of the recommendations in this report reflect the comments received through the consultation process.
A growing number of recent studies using plant-level data find a large degree of heterogeneity in the size, productivity, and growth patterns of manufacturing plants. In this paper, we explore the implications of this plant-level heterogeneity for macroeconomic dynamics and policy. In particular, we focus on the plant-level dynamics over the business cycle.
We first document the heterogeneity of U.S. manufacturing plants, using the Annual Survey of Manufactures (ASM) from the U.S. Census Bureau from 1972–1997. While previous studies on the entry and exit of producers document considerable fluctuations in entry and exit rates (e.g., Chaterjee and Cooper, 1993; Campbell, 1998), relatively little is known about how the characteristics of entering and exiting plants vary over the business cycle. We document the patterns of entry and exit over the business cycle in terms of rate, employment, and productivity. We find that entry rates differ significantly in booms and recessions. The differences in productivity and employment in booms and recessions are particularly larger for entering plants than the exiting plants. For example, the average employment of entering plants in recessions and their relative size (compared to incumbents) is larger than entering plants in booms. Moreover, the relative productivity of entering plants is also higher in recessions than in booms. Such differences are relatively small for plants exiting in booms or recessions.
