Term Premium Dynamics and the Taylor Rule

We explore the bond-pricing implications of an exchange economy where preference shocks result in time-varying term premiums in real yields with a Taylor rule determining inflation dynamics and nominal term premiums. We calibrate the model by matching the term structure of the means and volatilities of nominal yields. Unlike a model with exogenous inflation, a Taylor rule matching empirical properties of inflation leads to nominal term premiums that are volatile at long maturities. Increasing monetary policy aggressiveness decreases the level and volatility of nominal yields.

ESTIMASI BIAYA EKONOMI DEFORESTASI DI INDONESIA TAHUN 2011-2013

This study is aimed to estimate economic value of deforestation in Indonesia and contribution for forestry sub-sector of GDP in Indonesia from 2011 to 2013. This study has two main variables, economic value of deforestation and EDP. Technique used to estimate deforestation economic value is benefit transfer with Total Economic Value approach. The estimation results show that real cost of deforestation in Indonesia since 2011 to 2013 increase almost four times, or about Rp 1,5 trillion to Rp 5,6 trillion. Indonesia real value EDP in 2011 is Rp 51,8 billion, increases 1,58 percent in 2012 to Rp 52,6 billion, and decrease 0,53 percent to Rp 52,3 billion in years 2013. The contribution of deforestation for forestry subsector GDP is below one percent, but in nominal term, the deforestation always has an increased value.