The concept of the “natural” long-term interest rate, a rate that is determined by the underlying production capability of the economy, provides a way to check the internal onsistency of medium-term economic projections. Forecasters who use a neoclassical growth model to project the level of...

Despite the large size of U.S. net financial obligations to foreigners, U. S. residents have continued to earn more income on their assets abroad than foreigners have on their assets in the United States. In other words, the rate of return on U.S.-owned assets abroad is still higher than the...

Yield spreads between rates on Treasury nominal and inflation-indexed securities are thought to be distorted measures of expected inflation because of various biases. Three sources of bias are investigated in this paper: risk aversion, inflation uncertainty, and failure to account for the...

The Higher Education Amendments of 1998 direct CBO and other organizations to participate in a study group which shall evaluate the spread between each of the 30-day and 90-day commercial paper rates, and the 90-day London Interbank Offered Rate (LIBOR) to the 91-day Treasury bill rate. The...

The thrift crisis has presented the federal government with a cleanup bill of unparalleled magnitude. Estimates of the present-value cost range from $90 billion to $140 billion. Most observers acknowledge that the economic cost of the crisis already has occurred in the form of lost investment...

It is widely believed that monetary aggregates have failed to predict economic performance over 1983-87. This paper observes that the traditional definition of money (M1 less other checkable deposits, or M1A) shows no evidence of structural change, and yields lower prediction errors for both...