Phillips curves are central to discussions of inflation dynamics and monetary policy. New Keynesian Phillips curves describe how past inflation, expected future inflation, and a measure of real marginal cost or an output gap drive the current inflation rate. This paper studies the (potential)...

The discrete choice to adopt a financial innovation affects a household's exposure to inflation and transactions costs. We model this adoption decision as being subject to an unobserved cost. Estimating the cost requires a dynamic structural model, to which we apply a conditional choice...

We examine the possibility that nontraded goods may account for several striking features of international macroeconomic data: large, persistent deviations from purchasing power parity, small correlations of aggregate consumption fluctuations across countries, and substantial international real...

Much recent business cycle research focuses on moments of macroeconomic aggregates. We construct examples of real business cycle sample paths for output, consumption, and employment for the U.S. economy. Annual sample paths are generated from an initial condition in 1925, measured technology and...

Many international macroeconomic models link the real exchange rate to a ratio of marginal utilities. We examine this link empirically, allowing the marginal utility of consumption to depend on government expenditure, real money balances, or external habit. We also consider two environments with...

Economists often describe nominal exchange rates as forward-looking, so that they reflect discounted, expected, future fundamentals. This study applies a method for identifying the discount rate involved, without knowing or measuring fundamentals. Identification arises from assumptions on the...

Standard models of international risk sharing with complete asset markets predict a positive association between relative consumption growth and real exchange-rate depreciations across countries. The striking lack of evidence for this link - the consumption/real exchange-rate anomaly or...

We outline in turn criticisms made by econometricians of the methods used in empirical business-cycle research and then criticisms made by business-cycle researchers of some methods used by econometricians. The aim is to clarify and in some cases correct these criticisms. Overall there is no...

We propose a unified framework for studying the greenback-gold price during the U.S. suspension of convertibility from 1862 to 1879. The gold price is viewed as a floating exchange rate, with a fixed destination given by gold standard parity because of the prospect of resumption. We test this...

The gold-exchange standard in India 1893-1913 was characterized by a narrow target zone for the exchange rate, a wide annual range for the international interest-rate differential, and negative (seasonal) autocorrelation in interest rates. These properties are consistent with a standard...