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This paper tests for the existence of asymmetric information between the Federal Reserve and the public by examining Federal Reserve and commercial inflation forecasts. It demonstrates that the Federal Reserve has considerable information about inflation beyond what is known to commercial forecasters. It also shows that monetary-policy actions provide(More)
M ost noneconomists are fearful when an emerging China or India, helped by their still low real wage rates, outsourcing and miracle export-led developments, cause layoffs from good American jobs. This is a hot issue now, and in the coming decade, it will not go away. Prominent and competent mainstream economists enter into the debate to educate and correct(More)
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This article explores parallels between the debate prompted by Pareto's reformulation of choice theory at the beginning of the twentieth century and current controversies about the status of behavioural economics. Before Pareto's reformulation, neoclassical economics was based on theoretical and experimental psychology, as behavioural economics now is.(More)
Gray UROP Fund for their support. This paper would not have been possible without the help of a great many people. I am very grateful for the efforts that a number of journals made to supply me with data. In addition, many of the ideas in this paper were developed in the course of a series of conversations with other economists. I would especially like to(More)
Finance Association meeting and the Park City Western Finance Association meeting. We especially thank two anonymous referees whose comments greatly improved the paper. A detailed technical appendix is available at Abstract We provide a formal treatment of both static and dynamic portfolio choice using the Disappointment Aversion preferences of Gul (1991),(More)
This essay argues that the history of macroeconomics during the twentieth century can be divided into three epochs. Pre-1940: a period of exploration, during which all the right ingredients were developed. But also a period where confusion reigned, because of the lack of an integrated framework. From 1940 to 1980: a period during which an integrated(More)
REAL BOND RATES increased sharply in the early 1980s and have remained high since. Even today, in the midst of a world recession and low U.S. and Japanese short real rates, long real rates throughout the world remain unusually high. Pessimists trace the high rates to a decrease in the supply of capital. They point to the long string of fiscal deficits and(More)