This paper introduces a new approach to the empirical testing of the Lucas- Sargent-Wallace (LSW) "policy ineffectiveness proposition." Instead of testing that hypothesis in isolation from any plausible alternative, the paper develops a single empirical equation explaining price change that...

The most important conclusion of this paper is that the growth rate of the money supply influences the U.S. inflation rate more strongly and promptly than in most previous studies, because the flexible exchange rate system has introduced an additional channel of monetary impact, over and above...

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...

Robert Barro in his three papers on the topic(AER 1977, JPE 1978, and 1978 conference paper with Mark Rush). A distinction is drawn between the Lucas-Sargent-Wallace (LSW) theory that only unanticipated monetary changes influence real output, and the orthodox view that anticipated monetary...

For the longer stretch of history back to 1891, the paper provides numerous corrections to the growth of labor quality and to capital quantity and quality, leading to significant rearrangements of the growth pattern of MFP, generally lowering the unadjusted MFP growth rates during 1928-50 and...