Search Results
Journal Article
The outlook for net exports
Journal Article
Deposit deregulation and the behavior of M1
Working Paper
The cyclical behavior of prices: interpreting the evidence
Whether prices are pro- or counter-cyclical represents a major difference in the predictions of models that focus on aggregate demand shocks as the primary source of business cycle fluctuations, versus those that emphasize shocks to aggregate supply. Earlier studies have interpreted their finding of generally negative cross-correlations between output and prices in the post-WWII U.S. as being more consistent with supply-driven models. In the present paper, we ask whether this interpretation is appropriate. We show that the signs of price-output correlations have little to say about which type ...
Journal Article
The September G-5 meeting and its impact
Working Paper
Time varying equilibrium real rates and monetary policy analysis
Although it is generally recognized that the equilibrium real interest rate (ERR) varies over time, most recent work on policy analysis has been carried out under the assumption that this rate is constant. We show how this assumption can affect inferences about the conduct of policy in two different areas. First, if the ERR moves in the same direction as the trend growth rate (as is suggested by theory), the probability that an unperceived change in trend growth will lead to a substantial change in inflation is noticeably lower than is suggested by recent analyses (of inflation in the 1970s, ...
Working Paper
The demand for money: where do we stand?
Journal Article
Household inflation expectations and the price of oil: it's déjà vu all over again
The University of Michigan survey of consumers shows that expected inflation has moved up noticeably over the past few months, raising concerns that we may be in for a period of rising inflation. However, the increase in expected inflation likely reflects the excess sensitivity of consumers to food and energy prices. Consistent with this hypothesis, household surveys have not forecast inflation well in recent years, a period of volatile food and energy prices.
Working Paper
The wage premium puzzle and the quality of human capital
The wage premium for high-skilled workers in the United States, measured as the ratio of the 90th-to-10th percentiles from the wage distribution, increased by 20 percent from the 1970s to the late 1980s. A large literature has emerged to explain this phenomenon. A leading explanation is that skill-biased technological change (SBTC) increased the demand for skilled labor relative to unskilled labor. In a calibrated vintage capital model with heterogenous labor, this paper examines whether SBTC is likely to have been a major factor in driving up the wage premium. Our results suggest that the ...
Journal Article
Does OPEC set oil prices?