Restrictions on the time-series properties of one- and two-period nominal interest rates implied by a representative agent cash-in-advance model are derived and tested. Among these are the correlation of the difference between the forward rate and the one-period spot rate with the subsequent...

Causal relations between federal expenditure and taxation are analyzed using an approach based on the invariance of econometric relationships in the face of structural interventions. Institutional evidence for interventions or changes of regime combined with econometric tests for structural...

Eugene Fama's influential argument that the price level and real allocations are independent of the volume and composition of private financial portfolios, including bank deposits, is examined. An incomplete analysis of the role of financial assets leads to a failure to distinguish between real...

In the context of reviewing some of the important recent literature on the methodology of economics, this article argues for the continuity of economics, economic methodology, and philosophy against the proposition maintained by some so-called pragmatists and the rhetoric program that economics...

Advocates of real-business-cycle models typically hold calibration methods to be superior to econometric estimation as means of quantifying the models for policy analysis. This paper finds a coherent foundation for calibration methods in Herbert Simon's Sciences of the Artificial and the...