Journal Article
Procyclical prices: a demi-myth?
Abstract: This paper critically reevaluates recent claims that the postwar U.S. price level exhibits countercyclicality. While overall countercyclicality is confirmed, temporal disaggregation suggests a shift from pro- to countercyclicality in the early 1970s. Furthermore, the countercyclicality is markedly more pronounced for negative than for positive output innovations. The evidence thus casts doubt on single-source business cycle explanations.
Keywords: Prices; Business cycles;
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Bibliographic Information
Provider: Federal Reserve Bank of Minneapolis
Part of Series: Quarterly Review
Publication Date: 1991
Volume: 15
Issue: Spr
Pages: 25-28