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Many analysts have advocated using commodity prices as a guide for monetary policy. A necessary condition is that changes in commodity prices are good predictors of future aggregate price changes. This paper examines that proposition. It shows that while commodity prices can help produce more...

Many central banks give a high degree of prominence to the objective of controlling inflation. There are several price indexes that could be used by those banks to calculate inflation rates. The general principles guiding the choice of which index to use in the United States should be relevant...

How well does the market for Federal Funds Futures predict? Statistical estimates of the market's efficiency in predicting FOMC policy actions indicate that the forecasts contain useful information and are unbiased at the usual 5 percent level. That finding is of interest because it means that...

Many analysts have advocated using commodity prices as a guide for monetary policy. The basic reasoning can be simply put: “Money creation is intended to promote price stability and is best guided by an index of prices set in real markets.” (Wall Street Journal, 1988). The rationale for...