Abstract A number of recent papers have hypothesized that the Federal Reserve possesses information about the course of inflation and output that is unknown to the private sector, and that policy actions by the Federal Reserve convey some of this superior information. We conduct two tests of...

Traditional least squares estimates of the responsiveness of gasoline consumption to changes in gasoline prices are biased toward zero, given the endogeneity of gasoline prices. A seemingly natural solution to this problem is to instrument for gasoline prices using gasoline taxes, but this...

The slow recovery from the recession that ended in 2009 has been the subject of much analysis and comment. However, has the recovery really been slower than expected given the magnitude of the recession, historical patterns, and long-term changes in the U.S. economy and labor force? It is...

The paper investigates some properties of "near rational" models of the cycle, examining two types of framework. In the first, an otherwise classical, competitive economy is shown to respond to demand disturbances when some firms follow a near rational hiring policy. In the second model, a...

The business cycle analysis of Arthur F. Burns and Wesley C. Mitchell and the National Bureau of Economic Research presumed that aggregate economic variables evolve on a time scale defined by business cycle turning points rather than by months or quarters. Do macroeconomic variables appear to...

‘Iterated’ multiperiod ahead time series forecasts are made using a one-period ahead model, iterated forward for the desired number of periods, whereas ‘direct’ forecasts are made using a horizon-specific estimated model, where the dependent variable is the multi-period ahead value being...

Time series variables that stochastically trend together form a cointegrated system. OLS and NLS estimators of the parameters of a cointegrating vector are shown to converge in probability to the true parameter value at the rate T11d for any positive d. These estim mators can be written...