What makes economies rise and fall? What caused the Asian crisis, the recessions of the 1970's and 1980's, and even the Great Depression? According to many modern economists, shocks did. This unsatisfying answer lies at the heart of a currently popular framework for analyzing business cycle...

This paper examines the concept of inflation persistence in macroeconomic theory. It begins with a definition of persistence, emphasizing the difference between reduced]form and structural persistence. It then examines a number of empirical measures of reduced]form persistence, considering the...

A growing body of literature examines alternatives to the rational expectations hypothesis in applied macroeconomics. This paper continues this strand of research by examining the role survey expectations play in the inflation process and reports three principal findings. One, short-run...