U.S. inflation data exhibit two notable spikes into the double-digit range in 1973-1974 and again in 1978-1980. The well-known quot;supply-shockquot; explanation attributes both spikes to large food and energy shocks plus, in the case of 1973-1974, the removal of price controls. Yet critics of...

Central bank credibility plays a pivotal role in much of the modern literature on monetary policy, yet it is difficult to measure or even assess objectively. A survey of central bankers was conducted to determine their attitudes on two important issues: why credibility matters, and how...

This paper reports preliminary results from a large research project on business pricing which is currently underway. The idea is to use interviews with actual price setters to assess the validity of a dozen theories of price stickiness. The rather unorthodox (for economists) methodology is...

It is argued that policymakers, macroeconomists and microeconomists should all take high unemployment more seriously. The shortcomings of existing theories of unemployment are discussed, and a new definition of involuntary unemployment is proposed. A model is sketched in which falling aggregate...

When empirical stock-adjustment models of manufacturers' inventories of finished goods are estimated, there appear to be two local minima in the sum of squared residuals functions. At one local minimum, the estimated adjustment speed is typically quite high; at the other, it is typically quite...

This paper presents two macro models in which central bank policy has real effects on the supply side of the economy due to credit rationing. In each model, there are two possible regimes, depending on whether credit is or is not rationed. Starting from an unrationed equilibrium, either a large...