This paper assesses the time series properties of the ASA-NBER forecasts for several US macroeconomic variables. Specifically, we examine whether forecasts exhibit a weak form of rationality which fulfills the following conditions: (i) are the actual and forecast series integrated of the same order; (ii) are they cointegrated, and; (iii) is the cointegrating vector consistent with long run unit...

A general-equilibrium shopping-time model ofmoney demand is used to obtain estimates ofsome dynamic costs ofinflation under alternative monetary policy rules. After examining the welfare implications ofsteady-state inflation, dynamic welfare costs are evaluated for inflation-targeting and price-level targeting regimes in a stochastic setting in which agents are uncertain about the underlying in...

The canonical inflation specification in sticky-price rational expectations models (the new-Keynesian Phillips curve) is often criticized on the grounds that it fails to account for the dependence of inflation on its own lags. In response, many recent studies have employed a “hybrid” sticky-price specification in which inflation depends on a weighted average of lagged and expected future values...

The first exercise uses a different approach to impute missing values within price series. The method used in the paper is to fill missing prices with the last available price for each product. This approach is reasonable because the gaps in the online data last only a few days. However, official statistical offices deal with missing values in their monthly series in different ways. The standar...

F or gauging inflationary pressures, many policymakers and financial market analysts pay close attention to the behavior of wages. It is widely believed that if wage costs rise faster than productivity, the price level may rise as firms pass forward increased wage costs in the form of higher product prices. Hence changes in productivity-adjusted wages1 are believed to be a leading indicator of ...

economy is operating in the region of price stability, public expectations and beliefs about the central bank’s plans and objectives, always important, become even more so. First, because the public can no longer safely assume that the central bank prefers lower to higher inflation, expectations about future policy actions and future inflation may become highly sensitive to what the public perc...

A popular model in the literature postulates an interest rate rule, a NAIRU price equation, and an aggregate demand equation in which aggregate demand depends on the real interest rate. In this model a positive inflation shock with the nominal interest rate held constant is explosive because it increases aggregate demand (because the real interest rate is lower), which increases inflation throu...

OBJECTIVES Illegal drug use continues to be a major threat to community health and safety. We used international drug surveillance databases to assess the relationship between multiple long-term estimates of illegal drug price and purity. DESIGN We systematically searched for longitudinal measures of illegal drug supply indicators to assess the long-term impact of enforcement-based supply red...

A reform of the Eurosystem's inferior monetary-policy strategy is increasingly urgent, as noted by a number of observers. For instance, a recent extensive CEPR report finds the that the prominent first pillar of the Eurosystem's strategy, the money-growth indicator, " looks increasingly ridiculous, giving perverse signals that the ECB probably ignores " , and that it is " flawed beyond repair–b...

This paper provides a review of the concept of core inflation and evaluates the performance of several proposed measures. We first consider the rationale of a central bank in setting its inflation goal in terms of a selected rate of consumer price growth and the use of a core inflation measure as a means of achieving this long-term policy objective. We then discuss desired attributes of a core ...