The author estimate a decomposition of productivity and hours into technology and nontechnology components. Two results stand out: (1) the estimated conditional correlations of hours and productivity are negative for technology shocks, positive for nontechnology shocks; and (2) hours show a...

Is consumption more or less variable than predicted by the permanent-income hypothesis? To answer that question, the author develops a procedure based on a long-run restriction implied by the consumer's intertemporal budget constraints. In contrast to previous work, the approach here (1) does...

The paper reviews the recent literature on monetary policy rules. We exposit the monetary policy design problem within a simple baseline theoretical framework. We then consider the implications of adding various real world complications. Among other things, we show that the optimal policy...