Correlations of inflation with the growth rate of money increase when data are averaged over longer time periods. Correlations of inflation with the growth of money also are higher when high-inflation as well as low-inflation countries are included in the analysis. We show that serial...

When preferences are homothetic, utility can be expressed in terms of current consumption and a variable that captures all information about future opportunities. We use this observation to express the differential equation that characterizes utility as a restriction on the information variable...

This paper presents tractable and efficient numerical solutions to general equilibrium models of asset prices and consumption where the representative agent has recursive preferences. It provides a discrete-time presentation of the approach of Fisher and Gilles (1999), treating continuous-time...

The yield curve is shaped by (1) expectations of the future path of short-term interest rates and (2) uncertainty about the path. Uncertainty affects the yield curve through two channels: (1) investors’ attitudes toward risk as reflected in risk premia, and (2) the nonlinear relation between...