The Employment Act of 1946 created the Council of Economic Advisers as an institution and serves as a convenient marker of a broader change in opinions: the assumption by the federal government of the role of stability the macro- economy. The magnitude of this shift should not be understated:...

The 1970s were America's only peacetime inflation, as uncertainty about prices made every business decision a speculation on monetary policy. In magnitude, the total rise in the price level from the spurt in inflation to the five-to-ten percent per year range in the 1970s was as large as the...

Over the past century the long-run growth of six economies shows a strong association between investment in machinery and economic growth that holds both within and across nations and periods. A similar strong association holds for the post-world War II period for a broader cross section of...

During the 1929-33 slide into the Great Depression, the Federal Reserve took almost no steps to keep the money supply or the price level stable. Instead, the Federal Reserve acted - disastrously - as if the gathering Great Depression could not be avoided, and was best endured. Such a...

The pre-WWI period saw the heyday of "financial capitalism" in the United States: the concentration of securities issues in the hands of a few investment bankers which had substantial representation on corporate boards of directors. This form of organization had costs: it created a conflict of...

Economists believe that because technology is a public good national productivity levels should "converge." William Baumol(1986) argues that the imprint of convergence can be seen over the past century if one focuses attention on relatively rich nations that had the social capability to take...

This paper uses Taylor's model of overlapping contracts to show that increased wage and price flexibility can easily be destabilizing. This result arises because of the Mundell effect. While lower prices increase output, the expectation of falling prices decreases output. Simulations based on...

This paper examines the changing cyclical variability of economic activity in the United States. It first shows that the decline in variability since World War II cannot be explained by changes in the composition of economic activity or by the avoidance of financial panics. We then show that...

This note shows that contrary to widespread belief there is little evidence that the business cycle is asymmetric. Using American data for the pre- and post-war periods and data on five other major OECD nations for the post-war period, we are unable to support the hypothesis that contractions...

As measured by the pace of city growth in western Europe from 1000 to 1800. absolutist monarchs stunted the growth of commerce and industry. A region ruled by an absolutist prince saw its total urban population shrink by one hundred thousand people per century relative to a region without...