To be useful as policy indicators, the monetary aggregates M1 and M2 must either (1) provide information on the current state of the economy or (2) help predict future values of economic variables that are of concern to the policymakers. Statistical analysis shows that these aggregates perform...

Empirical studies of the consumption-wealth relationship often assume a framework in which aggregate household spending depends linearly on wealth, the underlying state variable. These studies have given rise to many estimates of the wealth effect. In a general equilibrium setting, however, both...

The postwar U.S. labor market has been characterized by steadily rising employment rates. An examination of the data suggests that two factors, namely demographic trends and increased female participation, have been largely responsible for this phenomenon; we focus on the latter factor. Within a...

Empirical evidence suggests that movements in international relative prices (such as the real exchange rate) are large and persistent. Nontraded goods, both in the form of final consumption goods and as an input into the production of final tradable goods, are an important aspect behind...

This paper investigates open market operations in Australia and incorporates some key features of these operations into a simple rational expectations macroeconomic model. Where relevant, comparisons with U.S. operating procedures are made. The major finding is that the Reserve Bank of Australia...