The Economic Freedom of the World report measures five dimensions of economic freedom, one of them being Sound Money. Compared to where it had been in decades for most of the West, inflation skyrocketed in 2021. Yet the indicator which measures inflation in the most recent year barely budged due to how it is specified and parameterized. This paper explores potential improvements on the methodology, although ultimately only modest improvements are achieved over simply changing the value of inflation that corresponds to zero (the lowest index score) in the simplest linear specification.

Price currents and newspapers are major sources of information on prices during the eighteenth and nineteenth centuries, but drawing conclusions about trends and fluctuations in values from the quotations in these sources poses several recurrent difficulties. After discussing the origins of the prices in these sources, we use a range of examples, mainly involving commodity prices, to illustrate important problems in working with historical price data. These include missing observations and price inertia, varying gaps between low and high price quotations, and the splicing together of price series from different sources or for different commodity qualities. The last two problems often arise from changes over time in the detail with which prices for heterogeneous commodities were reported.

We study the impact of uncertainty shocks using a disaggregated model featuring US state-level unemployment, and uncertainty measured using state-level Google search data. Importantly, the model captures spillovers across states and identifies substantial differences in peak responses and time dynamics. Moreover, the importance of national factors in propagating the effect of uncertainty is also heterogeneous across states, but less relevant than state-level factors. These heterogeneous effects are related to state-specific industry compositions and fiscal positions. In addition, we highlight the usefulness of disaggregated data in models of uncertainty and economic activity for the USA, based on the superior ability of the disaggregate model to predict aggregate uncertainty and unemployment.

This paper examines the effectiveness of forward guidance shocks in the US. We estimate a New Keynesian model with imperfect central bank credibility and heterogeneous expectations using Bayesian methods and survey data from the Survey of Professional Forecasters (SPF). The results provide important takeaways: (1) The estimated credibility of the Fed’s forward guidance announcements is relatively high, but anticipation effects are attenuated. Accordingly, output and inflation do not respond as favorably as in the fully credible counterfactual. (2) The so-called “forward guidance puzzle” arises partly from the unrealistically large responses of macroeconomic variables to forward guidance under perfect credibility and homogeneous fully informed rational expectations, assumptions which are found to be jointly inconsistent with the observed US data. (3) Imperfect credibility provides a plausible explanation for the empirical evidence of forecasting error predictability based on forecasting disagreement found in the SPF data. Thus, we show that accounting for imperfect credibility and forecasting disagreements is important to understand the formation of expectations and the transmission mechanism of forward guidance.

We present a new methodology that uses professional forecasts to estimate the effects of fiscal policy. We use short-term forecasts to better identify exogenous shocks to government spending by controlling for anticipatory information already in the public domain. We use longer-term forecasts to net out expectations from the future path of other variables, which improves accuracy and efficiency by focusing on more precise measures of the impact of shocks. We show that this improves the statistical fit relative to both local projection methods and vector autoregression-based analyses that do not control for the entire future path of expectations.

In the present work we study the evolution of the prices of the most representative goods of the Buenos Aires market in the decades after independence from the Spanish empire. The paper analyses the evolution of import, export and local prices in Buenos Aires for the first half of the 19th century and intends to contribute to a more accurate estimate of the intense process of price inflation and changes in relative prices that occurred in Buenos Aires during this period. We also aspire to be able to analyse the relationships between the increases in prices and the institutional effects of commercial blockades, the issuance of paper money and changes in the demand for goods that occurred in the commercial interaction of Buenos Aires. An attempt is also made to compare the dynamics of various baskets of goods, allowing us to evaluate the differentiated effects in local, regional and overseas supply and demand. With this in mind we analyse both general price indexes, with their main changes, and also aim to integrate a variety of products in baskets that represent as accurately as possible the diverse demands of the commercial space offered by the Buenos Aires market. Finally, we reexamine the effects of the price variations of the baskets of prices on various social sectors and regions linked to the significant interregional plaza represented by the Buenos Aires market.

Cattle are costly to transport, which could lead to segmented regional cattle markets. The cointegration of cattle prices over regions has been of research interest for decades. This article investigates price cointegration between regional cattle markets in the United States and proposes a simple procedure for incorporating a flexible transition function into an economic indicator–controlled smooth transition autoregressive (ECON-STAR) model to evaluate market dynamics. The empirical results show that these markets have been highly integrated when excess supply exists, but when cattle inventories decrease, the market pattern becomes very regionally segmented.

The aim of our study is to investigate how innovation is taking place through different research and development (R&D) activities and to establish a link between innovation and business sustainability in the context of Indian pharmaceutical companies. Our study is based on the secondary data. Sample data of 37 Indian pharmaceutical companies listed on the National Stock Exchange have been used based on the stratified sampling technique. For empirical analysis we have performed descriptive statistics, correlation matrix, and panel regression analysis as statistical techniques with the help of STATA 12.0 statistical package. R2 value can predict 100 and 98.20% variability in return on assets (ROA) and return on equity (ROE) in model 1 and model 2, respectively. In model 1, the value of c2 is 1.48 and its corresponding p value is 0.00 (<0.05) which means that the model is a good fit for interpretation. R&D intensity is having a positive effect on ROA and the effect is statistically significant at 1% level. Advertising and marketing intensity, capital intensity, leverage ratio and operating expenditure to the total assets ratio are having positive effect on ROA but the effect is not statistically significant. In model 2, the value of F statistics is 8025.62 and its corresponding p value is 0.00 which is <0.05. It means that the model is a good fit for study. R&D intensity is having a positive effect on ROE and the effect is statistically significant at 1% level. Advertising and marketing intensity, capital intensity and operating expenditure to the total assets ratio have positive effect on ROE and the effect is statistically significant at 1% level. Leverage ratio is having a negative effect on ROE but the effect is statically significant at 10% level.

This study investigates the relationship between cash and futures prices of soybeans and soybean meal from 1992 to 2013. Error correction models are estimated for the prices of both commodities. An exogenous measure of price variability is included in both models to determine if variability increases the speed with which cash and futures prices return to their long-run equilibrium relationship. This is used to measure the impact of price variability on short-run market efficiency and the price discovery process. The findings indicate that the level of price variability influences market adjustment rates and the price discovery process.

Five years after the financial crisis, the global economy remains unbalanced and many of the advanced countries are still struggling to return to robust, sustainable growth. Taking a historical perspective, I argue that this predicament reflects a failure to adjust to profound changes in the economic landscape, which have given rise to the (re-)emergence of major financial booms and busts. The economic developments that really matter now take much longer to unfold – economic time has slowed down relative to calendar time – and yet the planning horizons of economic agents have shortened. The key problems arise from the cumulative effects of past decisions on stocks, and yet these effects are treated as short-term flow issues. The risk is that instability will become entrenched in the system. Policy needs to adjust.

L’objectif de ce papier est d’évaluer la capacité de différents types de chocs fiscaux à améliorer l’explication des fluctuations de l’économie française considérée comme une petite é conomie ouverte. Ainsi, nous développons un modèle d’équilibre général intertemporel stochastique perturbé par des chocs technologiques et par des chocs fiscaux portant sur la structure de financement de dépenses publiques données, dans lequel l’hypothè se d’équivalence ricardienne n’est pas vérifiée (l’horizon des agents étant plus court, en espérance, que celui du gouvernement). Il s’avère que les différentes modalités de financement retenues (taxes distorsives et forfaitaires courantes et endettement public) n’ont pas les mêmes implications dynamiques. En particulier, dans ce mode le, le choix entre dette publique et taxe forfaitaire courante n’est pas neutre, du fait de la non-équivalence ricardienne. D’un point de vue quantitatif, la prise en compte simultanée de chocs technologiques et de chocs fiscaux distorsifs sur la production se révèle déterminante pour améliorer la reproduction des faits stylisés relatifs au marché du travail.

G. Duménil et D. Lévy soulignent le rôle du taux de profit dans la dynamique du capitalisme. Ils affirment réhabiliter l’économie classique et, en même temps, proposer une nouvelle interprétation de l’histoire économique américaine. Notre commentaire porte uniquement sur l’aspect théorique. La portée générale de leur théorie est mise en cause. En adoptant leurs hypothèses restrictives, la théorie néoclassique permet d’établir des résultats comparables en matière de stabilité. Quel que soit l’intérêt de leur modèle, les auteurs ne démontrent pas sa supériorité sur la dynamique standard, au moins en ce qui concerne les résultats généraux. Un second point de discussion concerne leur traitement de la monnaie et du crédit.

Dans le but d’analyser le cycle de productivité de l’emploi, cet article présente un modèle de cycles réels avec coûts d’ajustement croisés sur l’investissement et le travail. Le modèle est simulé et confronté aux faits stylisés du marché du travail. Nous évaluons plus particulièrement la capacité du modèle à reproduire un cycle de productivité de l’emploi. Nous montrons alors que l’amplitude du cycle de productivité ne dépend pas uniquement du poids des coûts d’ajustement de l’emploi, mais peut aussi résulter du degré de complémentarité, en termes de coûts d’ajustement, de l’embauche et de l’investissement. Au-delà de son explication du cycle de productivité, le modèle permet aussi de rendre compte de la dynamique de l’investissement et de l’emploi.

Ma contribution à la discussion du livre The Economics of the Profit Rate de Duménil et Lévy vise à mettre en avant trois thèmes, mêlant des considérations de critique et de clarification. D’abord, je discute la notion d’équilibre adoptée par ces auteurs. Ensuite, je commente la manière dont ils se séparent méthodologiquement de l’approche walrasienne. Enfin, au risque de soulever la polémique, je suggère que leur travail manifeste l’existence d’un décalage significatif entre une rhétorique marxienne et un message fondamental qui penche du côté de Smith et Hayek.

La Nouvelle Macroéconomie Keynésienne a récemment insisté sur les notions de complémentarité stratégique et de défauts de coordination. En particulier, l’hétérogénéité entre «répondants» et «non-répondants» a été perçue comme donnant un poids disproportionné aux «non-répondants». L’objet de cet article est de montrer que cette assertion est moins robuste qu’on ne le pensait. Nous définissons un critére d’évaluation du poids disproportionné dans des modèles dynamiques. Utilisant une variante du modèle canonique de Taylor de contrats imbriqués, nous montrons que, en vertu de ce critère, les «répondants» peuvent avoir une influence disproportionnée sur le produit agrégé.