This paper develops the view that monetary policy operates within a set of basic constraints that limit the set of outcomes that it can achieve.These include constraints on aggregate supply behavior that determine how a given path of nominal income growth will be divided between inflation and...

This paper reviews the main characteristics of cyclical behavior in the postwar U. S. economy and reviews the arguments for and against an activist stabilization policy to dampen business cycles. Four major behavioral characteristics are identified from summary data on U. S.postwar business...

This paper reviews the leading ideas that have emerged within two paradigms of price adjustment. Neither, it appears, provides a satisfactory theoretical scheme when taken in isolation. This paper concludes that an attempt to merge the more convincing elements of each is needed, and some...

This paper traces the evolution of macroeconomic events and ideas from the late 1940s to the present day. After a brief introduction that highlights the unique features of the main macroeconomic variables as compared to their behavior before 1947, the paper turns to an analysis of four main...

This paper demonstrates that the commonly used Expectational Phillips Curve (EPC) framework cannot explain the last eighty-seven years of aggregate price behavior in the United States. The EPC explanation, which in its most general form relates price change to expected inflation and the level of...

This paper makes no contribution to an understanding of the secular slowdown in productivity, except to add a new cyclical correction of the long-run trend. Its main objective is to examine the short-run behavior of aggregate labor productivity in isolation. In addition to the phenomenon of...

The most striking aspects of recent U.S. wage and price behavior are the small year-to-year variations in the rate of change of wages, the modest 1977-79 acceleration in the rate of change of both wages and the consumption deflator net of food and energy, and an unprecedented gap between the...

This paper develops the theory of price measurement when quality change is "nonproportional", yielding increases in the user value of a given product in a different proportion than the increase in production cost associated with the quality improvement. The theoretical section demonstrates that...

Inaccurate measures of the aggregate price level may distort short-run policy decisions and may produce misleading comparisons of productivity growth across decades and among nations. This paper serves a dual purpose of reviewing compactly the vast American literature on price and output...

This paper describes the development of the "triangle" model of inflation, which holds that the rate of inflation depends on inertia, demand. and supply. This model differs from most other versions of the Phillips curve by relating inflation directly to the level and rate of change of detrended...