We measure the United States capital stock of money implied by the Divisia monetary aggregate service flow, in a manner consistent with the present-value model of economic capital stock and asset pricing theory. The resulting measures differ substantially from the usual simple sum accounting monetary aggregates. We permit non-martingale expectations and time varying discount rates. Based on Bar...

V8W 2Y2; e-mail: [email protected]; FAX: (250) 721-6214 Abstract We examine whether models of inflation forecast targeting are consistent with the observed behaviour of the central banks of Australia, Canada, and the United States. The target criteria from these models restrict the conditionally expected paths of variables targeted by the central bank, in particular inflation and the output gap. W...

Consensus Economics forecasts for euro-area GDP growth, consumer and producer price inflation and the USD/EUR exchange rate are used by the Czech National Bank to make assumptions about future external economic developments. This paper compares the accuracy of the aforementioned Consensus forecasts to those of the European Commission, International Monetary Fund and Organization for Economic Co...

The monetary search model by Lagos and Wright (2005) is extended with imperfect information about nominal shocks à la Lucas (1972 and 1973). This framework is useful to estimate the welfare costs of expected and erratic inflation because it provides an avenue to identify the transactions affected by monetary shocks and how tolerant individuals are to the fluctuations of output in these transact...

The empirical literature on monetary policy shocks documents that contractionary shocks are followed by a persistent rise in interest rates and a persistent fall in output. Standard monetary business cycle models can account for the initial effects of monetary shocks, but have difficulty generating persistence. In this paper, I examine whether frictions that affect the asset allocation decision...

We investigate the role of respect and monetary gifts in the service industry. We report findings from purchases of more than 800 doner durum, a common lunch snack. Prior to the food’s preparation, we either give a compliment about the product, or a monetary gift by tipping. We repeat the interaction on five consecutive days. Our findings show that salespersons exhibit positive reciprocity in r...

The paper presents, by means of a structural equations model, an account of the economic freedom factors and their importance. Considering that economic freedom manifests through: business freedom, trade freedom, fiscal freedom, government size, monetary freedom, investment freedom, financial freedom, property rights, freedom from corruption and labour freedom. Results show that all the conside...

One of the most critical demographic events in the world today is population aging—the process by which the share of older individuals in the total population starts becoming larger. The aging phenomenon, which has been initially experienced by developed countries, is now steadily approaching the developing world. Projections show that over the next five decades, world median age will continue ...

The monetary unit assumption of financial accounting assumes a stable currency (i.e., constant purchasing power over time). Yet, even during periods of low inflation or deflation, nominal financial statements violate this assumption. I posit that, while the effects of inflation are not recognized in nominal statements, such effects may have economic consequences. I find that unrecognized inflat...

Financial assets are generally chosen for encapsulating wealth effects in empirical work on aggregate consumption, but there is growing interest in tangible wealth, notably housing, as a potential determinant. We estimate consumption functions for the G-5 on a Pooled Mean Group panel basis, which encapsulate roles for both tangible and financial wealth. Results suggest that tangible wealth play...