Accurate forecasts of inflation are important to policymakers and to individuals who must make decisions on the basis of expectations about the future purchasing power of the dollar. ; Recent research on forecasting inflation has shown that interest rates, by themselves, may provide useful...

The U.S. Department of Commerce composite index of leading indicators (CLI) is a widely cited and influential economic series. In this article, Evan F. Koenig and Kenneth M. Emery examine how well movements in the CLI predict business-cycle turning points. Using data that actually would have...

In the financial press, productivity-related wages are often cited as an inflation indicator. For example, recently slow rates of wage growth have been noted as a factor that will keep inflation rates low in the future. While inflation and wage growth do appear to be highly correlated over...

Recent developments in measuring the stance of monetary policy have highlighted an interesting puzzle--namely, that an unexpected tightening in monetary policy leads to an increase rather than a decrease in the price level. In this article, Nathan Balke and Kenneth Emery present evidence on the...

Many policymakers and financial market participants use the Federal Reserve's industrial capacity utilization rate as an indicator of future changes in inflation. During the past few years, however, the usefulness of the utilization rate as an inflation indicator has come under scrutiny. ; In...

Recently, several economists have argued that movements in the federal funds rate are a good proxy for changes in monetary policy. In this article, Nathan Balke and Kenneth Emery critically examine this view and the evidence supporting it. Using simple vector autoregressions, they find that...

Because the Federal Reserve is responsible for controlling the value of money, economic policymakers are very concerned with forecasting the public's demand for money. Inflation is one of several factors that have made forecasting the demand for money increasingly difficult over the past fifteen...

In this second of two articles on the economic impact of fundamental tax reform, Gregory Huffman and Evan Koenig extend their earlier framework for analyzing how the adoption of a flat-rate consumption tax would affect the economy over time. They argue that if tax reform is to be successful in...

The IS-LM diagram was developed as a tool for analyzing Keynesian economies-economies with "sticky" prices and myopic households. In a series of two articles, Evan Koenig shows that a graphical apparatus similar to the traditional IS-LM diagram can be used to analyze economies that have...

Evan Koenig presents a model that has proved successful at reproducing the pattern of M2 growth over the first half of the decade of the 1990s. The model suggests that a large gap between long-term bond yields and M2 deposit rates contributed importantly to the slow money growth that persisted...