Even when all past and present information is known, individuals usually remain uncertain about the permanence of observed variables. After reviewing the history and role of adaptive expectations and its statistical foundations in modeling this permanent-transitory confusion, the paper...

This paper builds on our earlier work, Meltzer and Richard (1981), on the size of government. How does the distribution of income changes as an economy grows? To answer this question we build a model of a labor economy in which consumers have diverse productivity. The government imposes a linear...

This paper builds on our earlier work, Meltzer and Richard (1981), on the size of government. How does the distribution of income changes as an economy grows? To answer this question we build a model of a labor economy in which consumers have diverse productivity. The government imposes a linear...