Work schedules, wages, and employment in a general equilibrium model with team production

An analysis of working hours, wages, and employment when production requires coordinating the work schedules of heterogeneous workers. The author shows that this coordination aspect of production can have important policy implications.Hours of labor ; Employment (Economic theory) ; Wages

Inventories and the business cycle: an overview

A review of research on the relationship between inventory investment and business cycle fluctuations, focusing on the developments of the last 15 years. A central issue in the literature, the relative importance of demand and supply shocks as sources of fluctuations, continues to be debated.Inventories ; Business cycles

An introduction to the search theory of unemployment

The author presents a model of job search that focuses on an unemployed person's decision to accept an offered job or to continue looking for a new one.Unemployment

Money growth and inflation: how long is the long run?

In their efforts to maintain low inflation, policymakers pay little attention to the growth rate of the money supply. Yet many studies have found that money growth and inflation a closely related, at least in the long run. But how long must money growth remain strong before it begins to concern policymakers? That is, what is the shortest period over which money growth seems to be reliably associated with inflation?Inflation (Finance) ; Money supply ; Monetary policy

Inflation and monetary policy in the twentieth century

This article characterizes the change in the nature of the money growth-inflation and unemployment-inflation relationships between the first and second halves of the twentieth century. The changes are substantial, and the authors discuss some of the implications for modeling inflation dynamics, notably for models of inflation that say that bad inflation outcomes result from poorly designed monetary policy institutions.Inflation (Finance) ; Monetary policy ; Unemployment

Understanding the Fiscal Theory of the Price Level

We review the fiscal theory of the price level. We place special emphasis on the theory's implications for the feasibility of price stability.

The business cycle: it's still a puzzle

The business cycle is characterized by contractions and expansions in economic activity that are synchronized across a broad range of sectors. The authors provide evidence to document this, and survey some of the theories that have been proposed to explain it. Although much progress has been made, research in this area is still at an early age.Business cycles

A simple way to estimate current-quarter GNP

This paper describes a method developed to predict the advance (first) estimate of inflation-adjusted gross national product (real GNP) using hours-worked data. Besides generating fairly accurate forecasts of advance GNP, the method has two implications. First, the Commerce Department seems to weigh the hours-worked data most heavily in its early estimates of real GNP but less and less so in its revised estimates. Second, analysts attempting to predict current-quarter outcomes in real time need to consider the availability and reliability of data at the time the forecasts are made.Gross national product ; Vector autoregression

The Band pass filter

The "ideal" band-pass filter can be used to isolate the component of a time series that lies within a particular band of frequencies, but applying this filter requires a data set of infinite length. In practice, some sort of approximation is needed. Using projections, the authors derive approximations that are optimal when the time-series representations underlying the raw data have a unit root, or are stationary about a trend.Time-series analysis

The Band Pass Filter

The `ideal' band pass filter can be used to isolate the component of a time series that lies within a particular band of frequencies. However, applying this filter requires a dataset of infinite length. In practice, some sort of approximation is needed. Using projections, we derive approximations that are optimal when the time series representations underlying the raw data have a unit root, or are stationary about a trend. We identify one approximation which, though it is only optimal for one particular time series representation, nevertheless works well for standard macroeconomic time series. To illustrate the use of this approximation, we use it to characterize the change in the nature of the Phillips curve and the money-inflation relation before and after the 1960s. We find that there is surprisingly little change in the Phillips curve and substantial change in money growth-inflation relation.