Rounding error is an important source of measurement error that is common in index data. The problem can be traced to rounding that occurs to limit the number of digits after the decimal place to be reported in rebased index data. Rounding error introduces distortions that affect variance...

The sensitivity of bond rates to macro variables appears to vary both over time and over forecast horizons. The latter may be due to differences in forward rate term premiums and in bond trader perceptions of anticipated policy responses at different forecast horizons. Determinacy of policy...

Monetary policy evaluation using structural macro models suggests that historical monetary policy responds less aggressively to inflation and the output gap than would an optimal policy rule. However, these results are obtained using models with constant term premia. This paper shows how term...

The expectations hypothesis is a theory of the term structure of interest rates that describes a conventional view of the transmission mechanism of monetary policy. According to the expectations hypothesis, bond rates are related to current and expected movements in the policy-controlled rate....

Forecasts by rational agents contain embedded initial and terminal boundary conditions. Standard time series models generate two types of long-run quot;endpointsquot;---fixed endpoints and moving average endpoints. Neither can explain the shifting endpoints implied by postwar movements in the...

Surveys provide direct information on expectations, but only short histories are available at quarterly frequencies or for long-horizon expectations. Longer histories typically contain only semi-annual observations of short-horizon forecasts. The authors fill in the gaps by constructing a...

Did foreign aid impede or catalyze democratization in Africa in the 1990s? We argue that after the Cold War, donors increased their use of technical assistance in aid packages, improving their monitoring capacity and thus reducing autocrats’ ability to use aid for patronage. To remain in...

We argue that two problems weaken the claims of those who link corruption and the exploitation of natural resources. The first is conceptual. Studies that use national level indicators of corruption fail to note that corruption comes in many forms, at multiple levels, and may or may not affect...