This study examines the long-term persistence in ex ante real interest rates. According to the long-run Fisher effect, ex ante real rates--the difference between nominal rates and expected inflation--should be mean-reverting and have no unit root. Empirical evidence on mean reversion has been...

This paper examines the aggregate implications of the production smoothing model. The analysis indicates that aggregation can be a source of bias distorting tests of production smoothing based on the relative variance of production and sales. It is shown that, depending upon the relative...

This paper explores the implications of the production lag for the firm's decisions. The authors establish a significant relationship between price behavior and the length of the production lag. They show that specific results in the literature are crucially dependent upon the assumption about...