Monetary Neutrality

Prize Lecture to the memory of Alfred Nobel, December 7, 1995.Money neutrality;

Trade and the Diffusion of the Industrial Revolution

A model is proposed to describe the evolution of real GDPs in the world economy that is intended to apply to all open economies. The five parameters of the model are calibrated using the Sachs-Warner definition of openness and time-series and cross-section data on incomes and other variables from the 19th and 20th centuries. The model predicts convergence of income levels and growth rates and has strong but reasonable implications for transition dynamics.

Do people really adapt to marriage?

Although cross-sectional studies have shown a reliable association between marital status and subjective well-being, a recent longitudinal study (Lucas, Clark, Georgellis, & Diener, 2003) found no support for the idea that happiness increases after marriage. Instead, participants who got married reported short-term increases followed by complete adaptation back to baseline levels of well-being. However, researchers have criticized this study on two grounds. First, these results contradict cohort-based analyses from a nationally representative sample. Second, these analyses do not control for pre-marriage cohabitation, which could potentially inflate baseline levels of well-being. The original data (plus four additional waves) are reanalyzed to address these concerns. Results confirm that individuals do not get a lasting boost in life satisfaction following marriage.life satisfaction anticipation ; habituation ; marriage ; cohabitation

Financial Innovation and the Control of Monetary Aggregates: Some Evidence from Canada

This paper presents an empirical test of the proposition that control of a monetary aggregate will generate a rise in its velocity.The test is carried out utilizing the Canadian experience of controlling Ml growth from 1975:3 to 1982:3. Section One of the paper presents evidence of the instability of the Canadian demand from Ml money since 1975:3. Section Two develops a specific form of the proposition which emphasizes the role of asset substitution between classes of chartered bank deposits. A relative asset demand equation is derived from a wealth maximization model subject to a technological transactions constraint and this equation is estimated from 1961 through 1982.The results lend support to the proposition that central bank control of Ml generated a rise in Ml velocity.