Using a simple modern macroeconomic model, we argue that the real effects of the Volcker disinflation in the early 1980s were mainly due to imperfect credibility, evident in volatility and stubbornness of long-term interest rates. Studying recently released transcripts of the Federal Open Market...

A standard statistical perspective on the U.S. Great Inflation is that it involves an increase in the stochastic trend rate of inflation, defined as the long-term forecast of inflation at each point in time. That perspective receives support from two sources: the behavior of long-term interest...

Reasoning within the New Neoclassical Synthesis (NNS) we previously recommended that price stability should be the primary objective of monetary policy. We called this a neutral policy because it keeps output at its potential, defined as the outcome of an imperfectly competitive real business...

The potential for large, shallow earthquakes and their associated seismic hazard in the eastern Caucasus, an area of dense population and sensitive industrial infrastructure, remains speculative based on historical precedent and current geologic and seismologic observations. Here we present...

Can nominal contracts make a difference for the neutrality of money if these arise endogenously in general equilibrium? This paper utilizes aversion of Lucas's seminal equilibrium business cycle theory to address this question. However, we depart from Lucas in assuming that (1) agents have...

This paper describes the <I>de facto</I> economic integration taking place between China, Hong Kong and Taiwan -- the "Chinese Economic Area" -- and analyses basic factors underlying the process. Even in the face of weak economic performance in OECD countries the integration has helped underpin rapid...</i>

This paper conducts a modern variant of the test proposed and carried out by Adelman and Adelman (1959). Using the methods developed by Burns and Mitchell (1946). we see if we can distinguish between the economic series generated by an actual economy and those analogous artificial series...

Many kinds of economic behavior appear to be governed by discrete and occasional individual choices. Despite this, econometric partial adjustment models perform relatively well at the aggregate level. Analyzing the classic employment adjustment problem, we show how discrete and occasional...