A discretionary policymaker can create surprise inflation, which may reduce unemployment and raise government revenue. But when people understand the policymaker's objectives, these surprises can- not occur systematically. In equilibrium people form expectations rationally and the policymaker...

U.S. velocity of base money exhibits three distinct trends since 1950. After rising steadily for thirty years, it flattens out in the 1980s and falls substantially in the 1990s. This paper explores whether the observed secular movements in velocity can be accounted for exclusively by endogenous...

Long-difference regressions for 1968-2013 show that a higher tax wedge reduces the C-corporate share of net capital stocks, equity (book value), gross assets, and positive net income, as well as the corporate share of gross investment. The C-corporate shares also exhibit downward trends, likely...

Rare events (RE) and long-run risks (LRR) are complementary approaches for characterizing macroeconomic variables and for understanding asset pricing. We estimate a model with RE and LRR using long-term consumption data for 42 economies. RE typically associates with major historical episodes,...

A new options-pricing formula applies to far-out-of-the money put options on the stock market when disaster risk dominates, the size distribution of disasters follows a power law, and the economy has a representative agent with Epstein-Zin utility. The elasticity of the put-options price is one...

Barro and McCleary look at differential investment in education across types of Protestantism. They find that literacy is enhanced more by Mainline Protestant schools then by Other Protestant schools and that Catholic schools have the weakest relation with literacy, likely because the ouster of...

Long-term data show that the dynamic efficiency condition r>g holds when g is represented by the average growth rate of real GDP if r is the average real rate of return on equity, E(re ), but not if r is the risk-free rate, rf .

Jorge Mario Bergoglio, since becoming Pope Francis in March 2013, is focusing on martyrdom in the Roman Catholic Church.

Barro and McCleary interpret the lowering of saint-making criteria combined with a geographic broadening of candidates as an intentional effort on the part of the Catholic Church hierarchy to universalize its relevance. More specifically, the Catholic Church - the world's longest-lasting...

The double-counting issue implies overstatement of levels of gross domestic product and national income. A proposed alternative measure of product and income involves a form of full expensing for gross investment.