We examine the relative ability of simple inflation targeting (IT) and price level targeting (PLT) monetary policy rules to minimize both inflation variability and business cycle fluctuations in Canada for shocks that have important consequences for global commodity prices. We find that...

It is commonly accepted that information is helpful if it can be exploited to improve a decision making process. In economics, decisions are often based on forecasts of up- or downward movements of the variable of interest. We point out that directional forecasts can provide a useful framework...

Economic policy makers, international organisations and private-sector forecasters commonly use short-term forecasts of real GDP growth based on monthly indicators, such as industrial production, retail sales and confidence surveys. An assessment of the reliability of such tools and of the...

The current economic crisis requires fast information to predict economic behavior early, which is difficult at times of structural changes. This paper suggests an innovative new method of using data on internet activity for that purpose. It demonstrates strong correlations between keyword...

The current economic crisis requires fast information to predict economic behavior early, which is difficult at times of structural changes. This paper suggests an innovative new method of using data on internet activity for that purpose. It demonstrates strong correlations between keyword...

I propose a novel method to test rational expectations. This method views the conditional expectation operator as a self-adjoint linear projection, which can exclude expectations formation models with only information frictions, overconfidence, or diagnostic expectations using aggregate level...

As is considered in this paper, none of the ever existing long wave theories can totally describe or correctly explain the chronic fluctuating characters of the capitalist world economy system since the year 1857. Based on Karl Marx's greatest work Capital and combined with considerable...

We explore the ability of traditional core inflation – consumer prices excluding food and energy – to predict headline CPI annual inflation. We analyze a sample of OECD and non-OECD economies using monthly data from January 1994 to March 2015. Our results indicate that sizable predictability...

I evaluate whether expectations of professional forecasters are consistent with the property of Bayesian learning that the expected uncertainty of a fixed target forecast should decline with the horizon. I obtain a measure of individual uncertainty from the density forecasts of the Survey of...

In this paper we introduce a “power booster factor” for out-of-sample tests of predictability. The relevant econometric environment is one in which the econometrician wants to compare the population Mean Squared Prediction Errors (MSPE) of two models: one big nesting model, and another...