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Economic fluctuations.

Economic Fluctuations

In the three years since my last Program Report, the NBER's Program in Economic Fluctuations has grown from 38 to 69 participants and has produced more than 200 Working papers. This article summarizes some of the major topics that we have addressed.

Research on Overall Macroeconomic Performance

One important area of research in the economic fluctuations program involves tracking down the sources of booms and recessions in the United States and other countries and understanding the role of financial and other factors in propagating these fluctuations. To that end, Ben S. Bernanke and Alan S. Blinder have studied the interaction between the real and financial sectors of the U.S. macroeconomy.(1) Bernanke and Mark Gertler have developed theoretical models to show how the net worth of borrowers can affect the stability and cyclical characteristics of the economy.(2) In related empirical work, Bernanke and John Y. Campbell have studied the phenomenon of increasing leverage of U.S. corporations.(3)

Motivated by the recent European experience, Olivier J. Blanchard has explored channels through which supply and demand shocks have long-lasting effects on the economy's equilibrium. In particular, with Danny Quah, he has studied the roles of bargaining in the labor market and imperfect competition in the goods market.(4)

Lawrence H. Summers has urged greater attention to relative wage theories in attempts to understand unemployment.(5) The importance of relative wages in different jobs, emphasized by Keynes, is related closely to recent efficiency wage theories. Empirically, Summers and Blanchard have written about the persistence of European unemployment, asking why unemployment remains so high near the so-called "full" employment level. In another area of research, Summers and Chris Carroll have compared private saving behavior in the United States and Canada.(6)

Bennett T. McCallum has produced a number of integrated overviews of several major areas of macroeconomic analysis.(7)

Christina D. Romer has focused on the causes of business cycles in the pre-World War II period and the changes in the nature of business cycles between the prewar and the postwar eras. In one study, she examined the role of the Great Crash of the stock market in October 1929 in initiating the Great Depression.(8) Another study found that beneficial supply shocks related to an agricultural boom may explain both the rapid deflation in 1921 and the fact that total production declined only slightly in that year, despite large declines in aggregate demand.

Mark W. Watson has worked on theoretical and empirical issues associated with the analysis of long-run relationships in aggregate economic time-series data. He has studied properties of univariate detrending methods, developed tests for cointegration (with James H. Stock), studied asymptotic properties of estimators in autoregressive models in the presence of unit roots (with Stock and Christopher Sims), and investigated the relationship between permanent and cyclical shocks to the economy (with Robert G. King, Charles I. Plosser, Stock, and Matthew D. Shapiro). In addition, Watson and Stock have served as codirectors of an NBER project to develop a new set of leading and coincident economic indicators.(9)

David Romer has been conducting research on whether--and if so, how--nominal disturbances have real effects. With Christina Romer he has investigated this question empirically by using nonstatistical information to isolate monetary disturbances.(10) With Laurence Ball, Romer has derived and tested an implication of endogenous models of price rigidity that differed from the predictions both of New Classical models and of the traditional Keynesian models that simply postulate the existence of price rigidity.(11)

John H. Cochrane has studied the random properties of aggregate output in the United States. His work shows that GNP probably has a tendency to return to a long-run growth path after a disturbance, but that the rate of return is slow. His research on consumption concludes that rejections of the permanent-income hypothesis and consumption-based asset pricing models can be caused by behavior that costs consumers a few cents per month.(12)

Campbell has studied the persistence of economic fluctuations. The traditional view is that fluctuations have little long-run effect because output returns rapidly to trend. In work with N. Gregory Mankiw, however, Campbell has argued that there is no empirical evidence for this return to trend. In fact, postwar U.S. data are consistent with the view that a 1 percent shock to the level of GNP should lead one to revise one's long-run forecast of GNP by more than 1 percent.(13) In work with Angus Deaton, Campbell has developed the implications of persistent fluctuations for the behavior of consumption.(14)

Steven N. Durlauf has worked on econometric issues raised by the research of Campbell-Mankiw, Cochrane, and others, which show that GNP and other macroeconomic variables have important random movements at frequencies well below the usual business cycle. Durlauf also has collaborated with me on the detection of specification errors or noise in models with expectations. The methods we have developed have applications in the stock market, inventory, investment, consumption, and other branches of macroeconomic research.

Thomas J. Sargent has been studying learning in dynamic economic environments. Specifically, how do various adaptive ways of forming views converge to rational expectations? Sargent's research considers two approaches to learning: recursive least squares and classifier systems from the artificial intelligence literature. His work on least squares is with Albert Marcet; his work on artificial intelligence systems is with Ramon Marimon. Sargent is also working with Rodolfo Manuelli on monetary theory in the context of models with missing markets.

Victor Zarnowitz has carried out a comparative study of major features of past and recent U.S. macroeconomic fluctuations. His model of lead-lag interactions among measures of real growth, inflation, interest rates, monetary and fiscal changes, and early stages of investment and production processes (selected leading indicators) ranks the effects of these variables similarly for the periods before and after World War II. The recently contested notion that instability diminished in the post-World War II era is generally upheld. Much of the moderation is probably attributable to a combination of structural, institutional, and policy changes. But the economy's performance deteriorated in the second half of the postwar period as compared with the first.(15)

Jeffrey A. Miron, Stephen P. Zeldes, and Robert B. Barsky have examined seasonal fluctuations in aggregate economic activity. Their first goal was to examine the seasonal patterns in standard macroeconomic variables and to document their quantitative importance. Seasonal fluctuations account for more than 85 percent of the fluctuations in the rate of growth of real GNP, and are present in every major type of economic activity. They also have found that business cycles and seasonal cycles are surprisingly similar and that countries or industries that exhibit substantial amounts of seasonal variation are also ones that exhibit substantial amounts of business cycle variation.(16)

Alan C. Stockman has studied the effects of real disturbances on exchange rates, the current account, and other macroeconomic variables.(17) He has also studied related issues concerning portfolio diversification and the international transmission of real aggregate disturbances. A particular focus of this work has been on explaining the higher variability of real exchange rates under floating-rate systems in a model with flexible prices.

Ray C. Fair has considered the sources of output and price fluctuations in the U.S. economy. He has also studied the effect of these macroeconomic events on presidential elections. His work on production and inventories has reached the conclusion that firms use inventories to smooth fluctuations in sales, in contrast to findings of other investigators.(18)

Quah has analyzed the aggregate effects of disturbances on the macroeconomy when the random character of GNP includes important permanent movements. He has developed a model that generates random permanent movements for GNP in which all disturbances have only transitory effects.(19) His work with Blanchard treated a macroeconomic model in which the roles of disturbances with permanent and transitory effects were interpreted explicitly. They concluded that demand disturbances played a significant role in explaining fluctuations over horizons of up to four years.(20)

Alan S. Blinder's recent research has centered on consumer durables and on the macroeconomic role of credit. In the former, he and Avner Bar-Ilan have applied the standard microeconomic model of inventories to consumer behavior and have tested its aggregate implications.(21) Blinder and Bernanke have been theoretically developing and empirically testing the role of credit in the transmission mechanism for monetary policy.(22)

Barsky and Gary Solon have looked again at the question of whether real wages are cyclical, Using longitudinal data on particular jobs, they find significant procyclicality; they argue that this fact is hidden in aggregate data by the increase in the number of low-wage workers during economic expansions.(23)

Russell Cooper has studied coordination problems in imperfectly competitive economies. Initial work in this area stressed the conditions under which coordination failures--an economy operating with recession conditions with unused resources--might arise. Subsequent work has focused on the way these economies change over time, the dynamics of entry and exit in imperfectly competitive economies, and the timing of discrete economic decisions, such as production runs.(24)

Andrei Shleifer, Kevin M. Murphy, and Robert W. Vishny have developed a model showing that when world trade is costly, a country can industrialize profitably only if its domestic markets are large enough. Their related work explores the idea that simultaneous industrialization of many sectors of the economy can be profitable for all of them, even when no sector can break even by industrializing alone. In macroeconomic applications of these ideas, they have developed a model of a business cycle in which a boom is a time when all firms find it desirable to have high output at the same time. Productivity rises in a boom because of favorable interactions among firms.(25)

Paul M. Romer's work has focused on the underlying trends in macroeconomic variables. The central problem in this work is to explain technological change as the outcome of actions taken by individuals acting in markets. Romer has pursued the idea that basic science and applied technical knowledge have features that distinguish them from conventional economic goods. To the extent that pure knowledge can be costlessly used in many different settings, replication arguments imply that it leads to a form of increasing returns to scale.

Andrew B. Abel has examined the role of intergenerational transfers in determining the effects of fiscal policy. This work has studied the conditions under which changes in the timing of taxes have important effects on saving, investment, and interest rates. Some of his work also explores the implications of nonaltruistic bequest motives and the effects of fiscal policy in the presence of various types of private insurance arrangements.(26)

Macroeconomics and Finance

Kenneth J. Singleton spent the fall of 1988 at the Bank of Japan and since then has been studying the sources of volatility in long-term government bond yields in Japan. He also has worked on the estimation of dynamic models of asset price determination using simulation methods. The methods proposed allow estimation of a large class of discrete and continuous-time models that do not necessarily admit closed-form solutions for asset prices.(27)

Frederic S. Mishkin conducted research on understanding real interest rate behavior and on whether futures market data can be used to understand the behavior of real interest rates. In addition, he has been analyzing the information in the term structure about future interest rate movements and also has been examining what the term structure of interest rates tells us about future inflation, both in the United States and in other OECD countries.(28)

Sanford J. Grossman has developed models of asset pricing in the presence of durable goods and transactions costs. He has shown that small transactions costs cause large reductions in the covariability of consumption changes and asset prices. He analyzed the informational implications of portfolio insurance and showed that there are significant differences between the use of synthetic and real options.(29)

Lars Peter Hansen has focused on the quantitative implications of intertemporal general equilibrium models. He has investigated the relationship between economic fluctuations and asset prices. A rich class of equilibrium models he has studied with Martin S. Eichenbaum implies a direct connection between asset roles and appropriately measured intertemporal marginal rates of substitution of consumers.(30)

Kenneth D. West has been studying the behavior of stock prices. He has shown that the volatility of stock prices is difficult to reconcile with some standard present value models, even if one allows for unit root nonstationarity in stock prices and dividends. At present, however, there is little formal evidence that nonstandard models--based on the idea that investors are influenced by fads--better explain the behavior of stock prices. He is also considering the determinants of inventories and output. Inventory movements do not appear to be driven primarily by movements in demand, either in the United States or in some other major industrialized countries. Inventories in some U.S. industries that maintain order backlogs provide a possible exception to this generalization.(31)

William Poole has studied the demand for money and related monetary policy issues. According to his work, there is growing evidence that the interest elasticity of the demand for money is in the neighborhood of 0.6 instead of approximately 0.1 as estimated by many studies in the 1970s. If the interest elasticity is as high as 0.6, then a monetary rule involving constant money growth will not be satisfactory in the face of major interest rate changes. Poole has explored alternative rules feeding back from observed changes in velocity and from interest rates. He has also completed a study of capital flows in the U.S. balance of payments in the 1980s.(32)

Measurement and Data

Robert J. Gordon has recently completed an NBER monograph on durable goods prices.(33) He gathered over 25,000 new price observations for producer and consumer durable goods for 1947-83 from many sources, including the Sears catalog and Consumer Reports magazine. The resulting indexes imply that the inflation rate for producers' equipment in the U.S. national accounts was overstated by 3 percent per year during 1947-83, and the inflation rate for consumer durable goods was overstated by about half that amount.

In research with Nathan S. Balke, Gordon has reworked Simon Kuznets's pre-1929 estimates of real GNP and the GNP deflator. Using new methods and additional data sources, they found that the cyclical behavior of real GNP differed from the standard series in individual episodes but retained roughly the same overall volatility. They calculate a substantially lower amplitude of changes in the GNP deflator, though.(34) With Martin N. Baily, Gordon also has studied methods of productivity measurement and has concluded that measurement errors explain less than one-third of the post-1973 U.S. productivity growth slowdown. Gordon also has studied differences in wage and price behavior across countries and historical eras, focusing on the hysteresis hypothesis in U.S. interwar and European postwar data. Also, in U.S. postwar data, Gordon's new specification of the inflation process casts doubt on the usual view that prices are marked up over wages, suggesting instead that prices and wages evolve independently.(35)

Macroeconomics and Industrial Organization

R. Glenn Hubbard, Ian Domowitz, and Bruce C. Petersen have studied cyclical movements in markups in U.S. manufacturing industries. Using panel data on prices and markups of oligopolies involved in repeated games, they find that markups in concentrated, homogenous-goods industries are higher than those of unconcentrated counterparts. They also examined data on markups for evidence of price wars and found no greater tendency for price wars to break out in recessions or in booms than in other periods. Finally, extending my recent work in estimating markups directly, Hubbard and his coauthors show that measures of industry concentration, import competition, and unionization are important for explaining markups. In addition, estimated markups fluctuate substantially over the cycle.(36)

Julio J. Rotemberg has studied several aspects of price flexibility. With Garth Saloner, he has examined the rigidity of price-setting by monopolists.(37) Rotemberg and Summers have analyzed the effect of inflexible prices and labor hoarding on the measurement of productivity.(38)

Mark Bils has studied how the cost of labor varies cyclically. He uses data on firms' use of overtime hours, which raises labor costs. He concludes that labor costs fluctuate much more over the cycle than most prices do and that firms absorb much of the difference in variations in markups, which are much higher in recessions than in booms. Bils has developed a model of pricing behavior by firms that identifies conditions under which these cyclical variations in markups might occur.

Consumer's Behavior

Consumption appears to be more responsive to current income than predicted by the rational-expectations-permanent-income hypothesis. Marjorie Flavin has studied the implication of the fact that consumers have information about their own well-being that the econometrician is unable to observe. She also has considered the problem of borrowing constraints; her preliminary finding is that even households that are not demonstrably liquidity-constrained exhibit a substantial degree of excess sensitivity to current income. Finally, she uses a microdataset to study the extent to which households use investment in durable goods to optimally allocate their consumption across time.(39)

Albert Ando has worked with large, detailed microdatasets to estimate responses of household saving to: age of the household; changes in productivity and real wage rates over time; demographic and sociological status of the family; the institutional environment, such as the customary retirement age; and other economic conditions, including the relative prices of important goods and services, such as land.

Mankiw and Campbell have reexamined the time-series evidence on the permanent-income hypothesis and have found a strong role for current income in determining aggregate consumption.(40) In work with Miles S. Kimball, Mankiw has studied departures from Ricardian equivalence caused by the interaction between income taxes and precautionary saving.(41) With David N. Weil, Mankiw found that fluctuations in growth in the adult population can explain most large fluctuations in the real price of housing.(42)

Macroeconomic Policy

Stanley Fischer has compared the rather different monetary policies and economic performance in the United States, Japan, and Europe from 1973-86.(43) He and Summers have studied the related question of whether nations should "learn to live with" inflation.(44) Fischer also organizes the Bureau's Annual Macroeconomics Conference and edits the NBER Macroeconomics Annual, which is based on the conference proceedings.

Robert J. Barro has studied the relationship of government spending and budget deficits to national saving and growth.(45)

For Rudiger Dornbusch, credibility of macroeconomic programs has been a chief interest. He has concluded that fully credible stabilization programs do not exist. The interesting question, therefore, is: What factors make programs more or less credible?(46) Dornbusch is also interested in the properties of real exchange rates over extended periods (1820-1989). Trade theory suggests that major structural changes in a country's external environment should be reflected in predictable changes in the terms of trade.

Herschel I. Grossman continues to focus on positive models of economic policy. In a paper with Suk Jae Noh, Grossman has developed a model of proprietary public finance and has analyzed the interplay between political competition and time consistency in a reputational equilibrium. Grossman also has presented a general analysis of inflation in a reputational equilibrium. In two related papers, coauthored with John Van Huyck, Grossman has analyzed reputational equilibriums in which sovereign debt is interpreted as a contingent claim.(47)

Jerry R. Green has studied the lock-in effects of capital gains taxation and of fixed interest rate mortgages on housing turnover. He also has studied social insurance and demographic uncertainty and contracts and contract renegotiation. This work has direct applications to labor contracts and to the analysis of sticky prices and wages.

(1)B. S. Bernanke and A. S. Blinder, "Credit, Money, and Aggregate Demand," NBER Working Paper No. 2534, March 1988. (2)B. S. Bernanke and M. Gertler, "Financial Fragility and Economic Performance," NBER Working Paper No. 2138, July 1987. (3)B. S. Bernanke and J. Y. Campbell, in Brookings Papers on Economic Activity 1 (1988). (4)O. J. Blanchard and D. Quah, "The Dynamic Effects of Aggregate Demand and Supply Disturbances," NBER Working Paper No. 2737, October 1988. (5)L. H. Summers, "Relative Wages, Efficiency Wages, and Keynesian Unemployment," NBER Working Paper No. 2590, May 1988. (6)O. J. Blanchard and L. H. Summers, "Hysteresis and the European Unemployment Problem," NBER Reprint No. 808, January 1987; L. H. Summers, "Why Is the Unemployment Rate So Very High Near Full Employment?" NBER Reprint No. 838, March 1987; and C. Carroll and L. H. Summers, "Why Have Private Saving Rates in the United States and Canada Diverged?" NBER Working Paper No. 2319, July 1987. (7)B. T. McCallum, "Inflation: Theory and Evidence," NBER Working Paper No. 2312, July 1987; "Real Business Cycle Models," NBER Working Paper No. 2480, January 1988; and "The Development of Keynesian Macroeconomics," NBER Reprint No. 947, December 1987. (8)C. D. Romer, "The Great Crash and the Onset of the Great Depression," NBERWorking Paper No. 2639, June 1988. (9)R. G. King, J. H. Stock, C. I. Plosser, and M. W. Watson, "Stochastic Trends and Economic Fluctuations," NBER Working Paper No. 2229, April 1987; and J. H. Stock and M. W. Watson, "A Probability Model of the Coincident Economic Indicators," NBER Working Paper No. 2772, November 1988. (10)C. D. Romer and D. Romer, "Does Monetary Policy Matter? A New Test in theSpirit of Friedman and Schwartz," NBER Working Paper No. 2966, May 1989. (11)L. Ball and D. Romer, "Real Rigidities and the Nonneutrality of Money," NBER Working Paper No. 2476, December 1987. (12)J. H. Cochrane, "The Sensitivity of Tests of the Intertemporal Allocationof Consumption to Near-Rational Alternatives," NBER Working Paper No. 2730, October 1988. (13)J. Y. Campbell and N. G. Mankiw, "Permanent and Transitory Components in Macroeconomic Fluctuations," NBER Reprint No. 924, October 1987. (14)J. Y. Campbell and A. Deaton, "Is Consumption Too Smooth?" NBER Working Paper No. 2134, January 1987. (15)V. Zarnowitz, "The Regularity of Business Cycles," NBER Working Paper No.2381, September 1987; "Facts and Factors in the Recent Evolution of Business Cycles in the United States," NBER Working Paper No. 2865, February 1989; and "Price, Wage, and Interest Rate Movements in Business Cycle Theories and Experience," forthcoming as an NBER Working Paper. (16)J. A. Miron and S. P. Zeldes, "Seasonality, Cost Shocks, and the Production-Smoothing Model of Inventories," NBER Reprint No. 1159, May 1989; and R. B. Barsky and J. A. Miron, "The Seasonal Cycle and the Business Cycle," NBER Working Paper No. 2688, August 1988. (17)A. C. Stockman, "Sectorial and National Aggregate Disturbances to Industrial Output in Seven European Countries," NBER Working Paper No. 2313, July 1987. (18)R. C. Fair, "Sources of Output and Variability in a Macroeconomic Model,"NBER Working Paper No. 2112, December 1986; "The Effect of Economic Events on Votes for President: 1984 Update," NBER Reprint No. 1187, May 1989; and "The Production-Smoothing Model Is Alive and Well," NBER Working Paper No. 2877, March 1989. (19)D. Quah, "What Do We Learn from Unit Roots in Macroeconomic Time Series?"NBER Working Paper No. 2450, December 1987. (20)O. J. Blanchard and D. Quah, "The Dynamic Effects..." (see footnote 4). (21)A. Bar-llan and A. S. Blinder, "Consumer Durables and the Optimality of Usually Doing Nothing," NBER Working Paper No. 2488, January 1988. (22)B. S. Bernanke and A. S. Blinder, "Credit, Money, and Aggregate Demand" (see footnote 1). (23)R. B. Barsky and G. Solon, "Real Wages and the Business Cycle," NBER Working Paper No. 2888, March 1989. (24)R. Cooper, "Optimal Labor Contracts, Imperfect Competition, and Underemployment Equilibria: A Framework for Analysis," NBER Working Paper No. 2060, October 1986, and "Dynamic Behavior of Imperfectly Competitive Economies with Multiple Equilibria," NBER Working Paper No. 2388, September 1987. (25)K. M. Murphy, A. Shleifer, and R. W. Vishny, "Income Distribution, MarketSize, and Industrialization," NBER Working Paper No. 2709, September 1988, and "Industrialization and the Big Push," NBER Working Paper No. 2708, September 1988. (26)A. B. Abel, "An Analysis of Fiscal Policy under Operative and InoperativeBequest Motives," NBER Working Paper No. 2298, June 1987; "Operative Gift and Bequest Motives," NBERReprint No. 1004, March 1988; "The Implications of Insurance for the Efficacy of Fiscal Policy," NBERWorking Paper No. 2517, February 1988; and A. B. Abel and L. J. Kotlikoff, "Does the Consumption of Different Age Groups Move Together? A New Nonparametric Test of Intergenerational Altruism," NBER Working Paper No. 2490, January 1988. (27)K. J. Singleton, "Asset Prices in a Time-Series Model with Disparately Informed Competitive Traders," NBER Working Paper No. 1897, April 1986. (28)F. S. Mishkin, "Can Futures Market Data Be Used to Understand the Behavior of Real Interest Rates?" NBER Working Paper No. 2400, October 1987, and "Understanding Real Interest Rates," NBER Working Paper No. 2691, August 1988. (29)S. J. Grossman, "Monetary Dynamics with Proportional Transaction Costs and Fixed Payment Periods," NBER Reprint No. 1172, May 1989. (30)M. S. Eichenbaum and L. P. Hansen, "Estimating Models with Intertemporal Substitution Using Aggregate Time-Series Data," NBER Working Paper No. 2181, March 1987. (31)K. D. West, "A Specification Test for Speculative Bubbles," NBER Reprint No. 968, January 1988; "Order Backlogs and Order Smoothing," NBER Working Paper No. 2385, September 1987; and "Evidence from Seven Countries on Whether Inventories Smooth Aggregate Output," NBER Working Paper No. 2664, July 1988. (32)W. Poole, "Monetary Policy Lessons of Recent Inflation and Disinflation,"NBER Working Paper No. 2300, June 1987. (33)R. J. Gordon, The Measurement of Durable Goods Prices, Chicago: University of Chicago Press, forthcoming. (34)N. S. Balke and R. J. Gordon, "The Estimation of Prewar GNP: Methodology and New Evidence," NBER Working Paper No. 2674, August 1988. (35)R. J. Gordon, "Productivity, Wages, and Prices Inside and Outside of Manufacturing in the United States, Japan, and Europe," NBER Reprint No. 970, January 1988; "Wage Gaps and Output Gaps: Is There a Common Story for All of Europe?" NBER Reprint No. 1096, February 1989; and "U.S. Inflation, Labor's Share, and the Natural Rate of Unemployment," NBER Working Paper No. 2585, May 1988. (36)I. Domowitz, R. G. Hubbard, and B. C. Petersen, "Market Structure and Cyclical Fluctuations in U.S. Manufacturing," NBER Reprint No. 1036, September 1988, and "Oligopoly Supergames: Some Empirical Evidence on Prices and Margins," NBER Reprint No. 1023, June 1988. (37)J. J. Rotemberg and G. Saloner, "The Relative Rigidity of Monopoly Pricing," NBER Working Paper No. 1943, June 1986. (38)J. J. Rotemberg and L. H. Summers, "Labor Hoarding, Inflexible Prices, and Procyclical Productivity," NBER Working Paper No. 2591, May 1988. (39)M. Flavin, "The Excess Smoothness of Consumption: Identification and Interpretation," NBER Working Paper No. 2807, December 1988. (40)J. Y. Campbell and N. G. Mankiw, "Permanent Income, Current Income, and Consumption," NBER Working Paper No. 2436, November 1987. (41)M. S. Kimball and N. G. Mankiw, "Precautionary Saving and the Timing of Texas," NBER Working Paper No. 2680, August 1988. (42)N. G. Mankiw and D. N. Weil, "The Baby Boom, the Baby Bust, and the Housing Market," NBER Working Paper No. 2794, December 1988. (43)S. Fischer, "Rules versus Discretion in Monetary Policy," NBER Working Paper No. 2518, February 1988. (44)S. Fischer and L. H. Summers, "Should Nations Learn to Live with Inflation?" NBER Working Paper No. 2815, January 1989. (45)R. J. Barro, "Government Spending in a Simple Model of Endogenous Growth," NBER Working Paper No. 2588, May 1988; "The Ricardian Approach to Budget Deficits," NBER WorkingPaper No. 2685, August 1988; and "A Cross-Country Study of Growth, Saving, and Government," NBER Working Paper No. 2855, February 1989. (46)R. Dornbusch, "Credibility, Debt, and Unemployment: Ireland's Failed Stabilization," NBER Working Paper No. 2785, December 1988. (47)H. I. Grossman and S. J. Noh, "Proprietary Public Finance, Political Competition, and Reputation," NBER Working Paper No. 2696, August 1988; H. I. Grossman, "A Generic Model of Monetary Policy, Inflation, and Reputation," NBER Working Paper No. 2239, May 1987; and H. I. Grossman and J. B. Van Huyck, "Seigniorage, Inflation, and Reputation," NBER Reprint No. 828,March 1987, and "Nominally Denominated Sovereign Debt, Risk Shifting, and Reputation," NBER Working Paper No. 2259, May 1987.
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Title Annotation:Program Report
Author:Hall, Robert E.
Publication:NBER Reporter
Date:Jun 22, 1989
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