On November 3 and 4, 2005, the Federal Reserve Bank of Chicago’s Inflation Research Center hosted the “2005 Conference on Price Stability.” This conference brought together leading academic economists and policymakers to discuss the latest research on the determinants of inflation and...

Paper for a conference sponsored by the Federal Reserve Bank of New York entitled Financial Innovation and Monetary Transmission

The authors build a small-scale econometric model based on the permanent income theory of consumption and balanced economic growth in order to study the influence of permanent and transitory factors on the level of economic activity.

Economic activity depends on agents' real-time beliefs regarding the persistence in the shocks they currently perceive to be hitting the economy. This paper uses an unobserved components model of forecast revisions to examine how the professional forecasters comprising the Blue Chip Economic...

During the second half of the 1990s, forecasters made large and persistent underpredictions of GDP growth; subsequently, they missed the drop off into the recession of 2001. Forecasters do not appear to have behaved unusually during this period: Their out-period forecasts were not far from their...