There is considerable disagreement in the empirical macro literature as to the degree of returns to scale in U.S. output. While many studies find evidence of a small degree of increasing returns, standard errors are typically large. This issue is of importance for assessing the possibility of...

It has been argued that the Great Inflation of the 1970s has been caused by a Federal Reserve policy that was not aggressive enough in combatting inflation. This led to a scenario where the U.S. economy operated under an indeterminate equilibrium with sunspot shocks becoming a driving force...