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Working Paper
Savings rates and output variability in industrial countries
The economics literature offers competing hypotheses about the relationship between savings rates and output variability. This paper examines data for eight industrial countries to determine if there is a discernible pattern between savings rates and cyclical volatility of output. We find a striking coincidence of high gross savings rates and high output variability when real GDP gaps are estimated from a constant growth trend. But there is also strong evidence that this coincidence is an artifact. The major conclusion is that there is not a robust relationship between average gross savings ...
Discussion Paper
Two papers on macroeconomic fluctuations
Journal Article
Business fixed investment: recent developments and outlook
Working Paper
Canadian financial markets : the Government's proposal for reform
This paper discusses Canada's financial sector, recent institutional changes, and the Government's recent (April 1985) proposal for financial market reform and its likely impact. Canada's financial markets have been dominated by traditional financial institutions known as the "four pillars". Although traditions and regulations have contributed to the evolution of Canadian financial markets, economic conditions and customer-provided incentives have recently created the major impetus for change. Structural changes have occurred along three separate but related tracks: product and service ...
Discussion Paper
Price, wage and inventory dynamics of a non-Walrasian firm
Working Paper
International comparisons of fiscal policy: the OECD and the IMF measures of fiscal impulse
Both the OECD and the IMF periodically estimate and publish measures of fiscal impulse to gauge the extent to which fiscal policy in the major industrial countries has become more or less expansive over time. This paper compares these measures analytically and numerically. The paper shows that the OECD and IMF measures of fiscal impulse differ in at least four fundamental ways: (1) the OECD includes fiscal drag under the presumption that it is part of the "structure" of fiscal policy, while the IMF excludes it from its adjusted measure of the budget balance; (2) the OECD and the IMF both ...
Working Paper
Should fixed coefficients be reestimated every period for extrapolation?
This paper demonstrates that forecast accuracy is not necessarily improved when fixed coefficient models are sequentially reestimated, and used for prediction, after updating the database with the latest observation(s). This is at variance with the now popular method (see Meese and Rogoff (1983, 1985)) of sequentially reestimating fixed coefficient models for prediction as new data "rolls" in. It is argued that although "rolling" may minimize the variance of predictions for some classes of estimators, "rolling" does not necessarily yield accurate predictions (i.e., predictions that are ...