The output gap is of central interest to policymakers. Being unobservable, however, its estimation is prone to error, particularly in real time. Errors result from revisions to the data and unavoidable end-point problems associated with the econometric techniques used to estimate it. Copyright...

An immortal, intertemporally optimizing consumer, who is ignorant of the link between bonds and future taxes, is exposed to the changing level of U.S. federal government debt over the thirty years, 1961-90. Estimates of the cost of ignorance are about $1 to $10 per annum. Provided governments do...

The length of the transmission lags from monetary policy to output has been the subject of much research over the years, but there are serious problems in isolating the lags with any precision. This paper uses a simple model of Australian output to estimate the length of the lags, and then...