for their comments and suggestions. Much of this research was done while Wall was a visiting scholar at the Institute for Monetary and Economic Studies at the Bank of Japan, whose hospitality and resources are greatly appreciated. Rachel J. Mandal provided research assistance.

The rapid increase in economic growth observed the late 1990s has inspired speculation about a change in the underlying trend rate of growth, attributable to an acceleration in the rate of technological progress. This paper considers the transition dynamics that are associated with such a change in the framework of a general equilibrium model that incorporates stochastic growth trends. The model suggests that endogenous transition dynamics associated with a shift in the technological growth trend can have important implications for macroeconomic growth patterns, particularly when technological change is investment-specific. Simulations of the post-WWII U.S. economy show that the model's internal propagation mechanism is capable of explaining a significant portion of the variation in growth rates over the sample period, particularly for investment, capital accumulation, and employment.

In the immediate aftermath of Hurricane Katrina, speculation arose that the Federal Reserve might respond by easing monetary policy. This paper uses a dynamic stochastic general equilibrium (DSGE) model to investigate the appropriate monetary policy response to a natural disaster. We show that the standard Taylor (1993) rule response in models with and without nominal rigidities is to increase the nominal interest rate. That finding is unchanged when we consider the optimal policy response to a disaster. A nominal interest rate increase following a disaster mitigates both temporary inflation effects and output distortions which are attributable to nominal rigidities.

For over two decades, the FOMC has included in its policy decisions a statement of bias toward subsequent tightening or easing of policy. This article examines the predictive content of these statements in a Taylor-rule setting, finding that they convey useful information for forecasting changes in the federal funds rate target, even after controlling for policy responses to inflation and the output gap. Moreover, the evidence suggests that this asymmetry can be represented in terms of shifts to the parameters of the Taylor-rule equation, indicating a greater or lesser degree of responsiveness to information about inflation and output. (JEL E52, E58)

A paper recently published in the journal Tobacco Control purports to show that the implementation of a smoking prohibition in Delaware had no statistically significant effect on the revenues of three gaming facilities in that state. After undertaking a thorough analysis of the data, I find that the smoke-free law did affect revenues from gaming in Delaware. Total gaming revenues are estimated to have declined by at approximately $6½ million per month after the implementation of Delaware=s Clean Indoor Air Law. This represents a loss nearly 13% relative to average monthly revenues in the year preceding the smoking ban.