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Home , Costas Azariadis, Martin Feldstein, Michael Rothschild, Neil Wallace, Robert Hall (economist)

This PDF is a selection from an out-of-print volume from the National Bureau of Economic Research

Volume Title: and Economic Policy

Volume Author/Editor: Stanley Fischer, editor

Volume Publisher: Press

Volume ISBN: 0-226-25134-9

Volume URL: http://www.nber.org/books/fisc80-1

Publication Date: 1980

Chapter Title: List of Participants, Index

Chapter Author: Stanley Fischer

Chapter URL: http://www.nber.org/chapters/c6268

Chapter pages in book: (p. 285 - 294) List of Participants

Professor Costas Azariadis Department of University of Pennsylvania Philadelphia, PA 19174

Professor Department of Economics University of Rochester Rochester, NY 14627

Professor Department of Economics Cambridge, MA 021 38

Professor Alan Blinder Department of Economics Princeton, NJ 08540

Professor Karl Brunner Graduate School of Management University of Rochester Rochester, NY 14627

Professor Phillip Cagan Department of Economics New York, NY 10027

Professor Rudiger Dornbusch Department of Economics Massachusetts Institute of Technology Cambridge, MA 02139 285 286 List of Participants

Professor Department of Economics Harvard University Cambridge, MA 02138

Professor Stanley Fischer Department of Economics Massachusetts Institute of Technology Cambridge, MA 02139

Professor Jacob Frenkel Department of Economics University of Chicago Chicago, IL 60637

Professor Benjamin Friedman Department of Economics Harvard University Cambridge, MA 02138

Professor Robert Gordon Department of Economics Northwestern University Evanston, IL 60201

Professor Jerry Green Department of Economics Harvard University Cambridge, MA 0213 8

Professor Herschel Grossman Department of Economics Providence. RI 02912

Professor Department of Economics Stanford, CA 94305

Professor Peter Howitt Department of Economics University of Western Ontario London, Ontario Canada

Dr. John Kraft National Science Foundation Washington, DC 20550

Dr. David Lindsey Board of Governors of the Federal Reserve System Washington, DC 20551 287 List of Participants

Professor Robert Lucas Department of Economics University of Chicago Chicago, IL 60637

Professor Bennett McCallum Department of Economics University of Virginia Charlottesville, VA 22901

Dr. Charles McLure National Bureau of Economic Research Cambridge, MA 02139

Dr. Frank Morris President, Federal Reserve Bank of Boston, MA 02106

Professor Charles Nelson Department of Economics University of Washington Seattle, WA 98195

Dr. Dan Newlon National Science Foundation Washington, DC 20550

Professor Michael Parkin Department of Economics University of Western Ontario London, Ontario Canada

Professor Edmund Phelps Department of Economics New York University New York. NY 10003

Professor James Pierce Department of Economics University of California, Berkeley Berkeley, CA 94720

Professor William Poole Department of Economics Brown University Providence, RI 029 12

Professor Edward Prescott Graduate School of Industrial Administration Carnegie-Mellon University Pittsburgh, PA 15213 288 List of Participants

Professor Michael Rothschild Department of Economics University of Wisconsin Madison, WI 53706

Mr. Mark Rush Department of Economics University of Rochester Rochester, NY 14627

Professor Robert Russell Council on Wage and Stability Washington, DC

Professor Department of Economics Massachusetts Institute of Technology Cambridge, MA 02139

Dr. Frank Schiff Committee for Washington, DC 20006

Professor Robert Shiller Department of Economics University of Pennsylvania Philadelphia, PA 19 174

Professor Department of Economics Massachusetts Institute of Technology Cambridge, MA 02139

Professor John Taylor Department of Economics Columbia University New York, NY 10027

Professor Department of Economics Minneapolis, MN 55455

Dr. Robert Weintraub House Banking Committee Washington, DC 205 15

Dr. Mark Willes President, Federal Reserve Bank of Minneapolis Minneapolis, MN 55480 Index

Adaptive expectations, 87 Blinder, Alan A., 49-54, 5711, 6311, 90, Aggregate demand, determinants of, 106, 114, 195, 243, 283 76-80, 254; dynamics of, 88 Box-Jenkins forecasting technique, 147- Aggregate supply, determinants of, 81- 48 84, 105-6. See also Lucas supply Brock, W. A., 216 function; Output equation; Supply Brookings Papers on Economic Activ- function ity, 249, 280n Agricultural , 251 Brunner, Karl, 244 Anticipated , 214-18; effect on Bryant, J., 21511 investment, 217; and real balances, Buchanan, J. M., 20911, 244 216 Bulow, J., 22n Anticipated money shocks: defined, 82; Burbidge, John B., 259n effect on real output, 2, 213-18; ef- Bureau of Labor and Statistics, 4711, 147 fect on price level, 82-100; measured, 24 Cagan, Phillip, 82, 87, 157-60, 244, 283 Arbitrage conditions, 80, 111, 165 Calvo, A. G., 114, 170, 232n, 236 Arrow-Debreu model, 264 Capital goods, price of, 79, 111, 173; Assets markets, 77, 79-81 Tobin’s q, 9, 104, 112 Asymptotic sampling theory, 126 Capital-output ratio, 175 Capital stock: and corporate tax rate, Backward induction, determining equi- 173-75, 189; and investment credit librium, 182 rate, 173, 189; golden rule, 216 Bagehot, W.,224 Carlson, J. A., 147-48 Bailey, S. K., 201 Census X-11 program, 126 Barro, Robert, 1, 3, 8, 11-13, 15-19, , determinants of, 76-78 75, 78, 8311, 102, 149, 152-53, 157, , 104 162, 172, 195, 206, 211, 213, 218, Consumption loans model, 215 22011, 22111, 223, 235, 254 Cooper, J. P., 55n Becker, G. S., 177, 22211 Corrado, C., 87, 89 Bellman’s principle of optimality, 17011, Council of Economic Advisors: estab- 181 lished, 201; and benchmark unem- Bicksler, J. L., 147 ployment rate, 256. See also Employ- Blanchard, Olivier Jean, 2, 18-19, 50 ment Act of 1946 289 290 Index

Cross equation restrictions, 69-70, 100, Fixed investment equation, 77-79 162; and unanticipated money growth Fixed money growth rule, institutional hypothesis, 28-30 framework for, 208-9. See also Pol- icy rules vs. discretionary policy; Darby, M. R., 124 Political process Debreu, G., 185n Flexible accelerator mechanism, 193 Demand for money equation, 84, 125- Forward solutions, to dynamic pro- 27, 130-31; elasticity of, 79 cesses, 86 Diamond, P. A., 185n Friedman, Benjamin, 71, 282 Dillar, S., 140 Friedman, Milton, 7, 47n, 132, 154, Disequilibrium models, 14, 225, 236 159, 186, 199-202, 207, 212, 218n, Drazen, A., 216 223, 22411, 227, 229, 232, 242 Dynamic models: stability of, 85; of Friedman program, 199-200, 206-9 aggregate demand, 88 Froyen, Richard T., 52 Furstenberg, G. M. von, 8411, 104 Eckstein, O., 228, 282 Econometric models: annual vs. quar- General Maximum Price Regulation, terly data, 39-48; predictive ability 134 and parameter invariance, 2, 5, 17, Germany, David, 21911 102-3, 192-93, 222-29; simulations, Ghez, G. R., 177, 222n 87-100 Gibson’s Paradox, 144n Economic Stabilization Agency, 174 Glass, Carter, 136, 138 Efficient taxation, 185 Gordon, D. F., 266 Elasticity: of labor supply, 3, 183; of Gordon, Robert J., 3, 18, 55-63, 114, demand for money, 79; of output 21111, 244, 283 supply, 27, 63, 79; of price level, 27 Government: behavior as solution to a Act of 1946, 200-203, 208 maximum process, 8, 13, 16; and abil- Equilibrium, definition of, 180-82 ity to control fluctuations, 6; ability Expectations equilibria, 119, 135 of democratic process to control, 205; and reaction speed compared with Fair, Ray C., 51, 10311 private agents, 19, 212. See also Po- Fama, E. F., 118, 120, 143-44, 146, litical process 161 Government bonds, as components of Federal expenditure, 24, 30, 33 wealth, 77-78 Federal funds rate, 270 Granger, C. W. I., 146 Federal Reserve system: the Accord of Granger-Sims causality, 149, 153, 155 March 1951, 138; Act of 1913, 135; Gray, J. M., 16 independence of, 9; as a lender of Great Depression, and monetary insta- last resort, 231; performance of, 135- bility, 207, 227, 232. See also Mone- 43; reaction function of, 51, 54, 67n, tary policy 70-71 112-13, 117, 125-28 Green, Jerry, 164, 187, 244 Feldstein, Martin, 124, 146, 163-64, Grossman, Herschel I., 1, 27, 56, 165, 16911, 187-89, 21711 243-44, 254 Fiat money, 224 Fiscal policy: during 1971-74, 273; ef- Hall, Robert E., 20, 71, 114, 165, 175- fectiveness of systematic policy, 15- 76, 190-91, 195, 22111, 235-38, 282 16, 276; nonneutrality of, 2; rules for, Hanson, J., 15 169-70, 186-87. See also Policy rules Harberger, A., 18511 vs. discretionary rules Hatanaka, M., 105 Fischer, Stanley, 14-15, 19, 50, 52-53, Hercowitz, Z., 2, 13, 15 55x1, 6311, 6611, 81, 90, 106, 119 Hess, P. J., 147 Fisher effect, 159, 162 Hicks, J. R., 256 Fisher, I., 214n Hodrick, R. J., 192n 291 Index

Howitt, Peter, 241-43 Lessard, D., 217x1 Human capital, as a component of Lilien, D., 236 wealth, 76 Lindsey, David E., 111-13 Hynes, A., 266 Liquidity effect, 132 Hyperinflations, 122-23 LM curve, 107-10 Lucas, Robert E., Jr., 2-3, 11-12, 14- Identification problems, 59-62, 100, 15, 17, 20, 27, 49-50, 53, 55, 75, 102, 104-5, 126 118, 170, 172, 175, 177, 184, 188, Index bonds, 121-22, 124, 160 192,218,222,22611,228,264,266-67 Inflation: effect on capital stock, 174, Lucas-Sargent-Wallace hypothesis, 50, 217; cost-push, 69, 261-62; interac- 53, 55-70, 118; and stabilization pol- tion with tax system, 217; repressed, icy, 55-57 and , 255; anticipated, Lucas supply function, 51-53, 118, 214-18 22 1-22 Inflationary expectations, 6-7, 11-12, 126; in steady state, 84-85; and real McCallum, Bennett T., 14-15, 19, 50n, interest rates, 50, 67 102-6, 111 Inflation tax, 217-18 McCauley, F. R., 136 Information: costs of acquiring, and McFadden, D. L., 18511 price inflexibility, 10; and nonneu- Malinvaud, E., 253-55, 262 trality hypothesis, 12-15, 243-44 Mancke, Richard B., 27411 Interest rates: as predictors of inflation, Markets: existence of, 266; clearing vs. 118-56; and interactions with tax nonclearing, 3, 7-8, 14-15, auction rates, 163-64; seasonal fluctuations vs. customer, 56, 250 in, 135-43. See also Real interest Marks, Robert E., 25411 rate Maximum likelihood criterion, 28, 33, Intertemporal substitution of leisure, 2- 34, 182 3, 172, 177, 188-89, 195 Mayer, T., 176 Investment, in a static model, 76-79; in Metzler, L., 76 a dynamic framework, 176; effect of Military personnel in unemployment inflation on, 217 equation, 2, 5, 30-32, 34-39, 54 Investment credit rates, 2; as a stabili- Mill, J. S., 157 zation tool, 185-89 Minimum wage and unemployment, 25 IS curve. 107-10 Mirlees, J. A., 18511 Misallocation hypothesis: defined, 12- Joines, D., 148 13; and nonneutrality hypothesis, 16- Joint estimation procedure, 24-32, 69 17; and variance hypothesis, 12-13 Jorgenson, D. W., 175 Modigliani, F., 171, 21111, 21711, 22611, 228 Keynes, J. M., 234 M1, 24, 64-66 Keynesian theory, 5, 50, 52, 190, 262- Monetary policy: accommodating, 263, 63; and the Employment Act, 201, 274; countercyclical, justified, 224- 209; and forecasting theory, 203; and 26; during 1971-75, 228, 269-82; ex- nonneutrality of money, 221; based pansionary, 263, 276; as a feedback on price inflexibility-non-market- rule, 237; instability of, and Great clearing models, 14-15, 221, 236; and Depression, 207, 227, 232; optimal IS-LM models, 237 feedback rules, 11-12, 15, 51-52; sys- King, Robert, 15 tematic effectiveness of, 15-16 Kydland, Finn, 2, 19, 20, 232 Monetary transmission mechanism, 1- 2, 50, 94-95, 216; via real balance Labor supply and interest rates, 215 effect or interest rates, 216 Laffer curve, 204 Money growth rates: equation for, 24, Leiderman, L., 27n 32-33, 39-40, 64-66; fixed rule vs. 292 Index

Money growth rates (cont.) Phillips curve: and aims of the Federal discretion, 21 1-48, 277-89; historical Reserve, 232; in Keynesian model, analysis of, 135-54; variance of, 12, 256, 262; and natural rate hypothesis, 158. See also Policy rules vs. discre- 6; due to price inflexibility, 221, 264; tionary policy stability of, as a basis for policy, 204, Morris, Frank, 196, 244, 283 219, 271-72 MPS model, 87-91 Pierce, James L., 162-63, 279-82 Mundell effect, 98 Plosser, C. I., 25n Polemarchakis, H., 222n Natural level of output, 7, 11, 219 Policy effectiveness interval, 118, 153 Natural rate hypothesis: defined, 6; Policy evaluation, 3, 227-29 based on clearing or non-market- Policy rules vs. discretionary policy, clearing models, 7-8; estimates of, 205-7, 211, 214-26, 230-33, 278-80 53-54; and rational expectations hy- Political process: and the public inter- pothesis, 6-9. See also Natural rate est, 8-9; ability of, to produce eco- of unemployment; Phillips curve nomic policy, 5, 277-78; and the Natural rate of unemployment, 31-32, political cycle, 55; and fixed rules, 54, 270 208-9. See also Government; Policy Nelson, Charles R., 71, 147, 160-62, rules 195 Poole, William, 2, 20, 117n, 195, 22311, Neutrality hypothesis: defined, 10; and 228, 243, 27211, 284 rational expectations, 10-17; con- Portfolio diversification, 215 sistency with nonneutrality hypothe- Prescott, Edward C., 2, 19-20, 232 sis, 13-15 Price Control Act, 134 Newbold, P., 146 Price controls: effect of, during World Noncooperative game, 265 War 11, 26; effect of, on inflation dur- Non-market-clearing model, 14-1 6; and ing 1972, 270; during 1973-74, 273- risk shifting, 14. See also Keynesian 74; removal of, in 1974, 250 theory; Price rigidity Price level equation, 25-26, 37-48, 81- Nonneutrality hypothesis: defined, 10- 84, 257 11; and rational expectations, 10-17; Price rigidity: and nonneutrality hy- consistency with neutrality hypothe- pothesis, 7, 50, 114; due to risk shift- sis, 13-15; and anticipated inflation, ing, 14; as a source of Keynesian 214-18 theory, 223, 236; in the short-run, Nordhaus, W. D., 55, 104 235-36; and transactions costs, 225 changes, as exogenous sup- Observational equivalence, 52, 62 ply shocks, 178-84 Okun, A. M., 250 Profits, as a function of output, 80, OPEC: and oil price rises as exogenous 88-98 supply shocks, 250-51, 259, 262-63, 270; and oil embargo, 274 Optimal linear forecasts, 187 Ramsey, F. P., 187 Optimum fiscal policies: based on fiscal Rapping, L. A., 177, 188, 222n nonneutrality, 2; need for, 170-71, Rational expectations: and equilibrium, 186-87. See also Fiscal policy 118-19, 135; in financial markets, 11; Output equation, 25, 34 and natural rate hypothesis, 9-13; Outside money, as a component of and nonneutrality of money, 9-15; wealth, 78 significance of, 15-17; stabilizing ef- fects of, 85-87 Parkin, Michael, 19, 107-1 1 Rational expectations postulate, 10; Pashigian, P., 193 strong, semistrong, and weak, 212n Perry, George L., 193 Rationally expected real rate of inter- Phelps, Edmund S., 7, 14, 50, 114, 119, est, 117, 120, 123 185, 195, 236, 250 Real balance effect, 216 293 Index

Real interest rate: definitions of, 117- Subjective probabilities, 11; and defini- 19; expected, 2, 18, 79, 117, 120, 123; tion of equilibrium, 119 effect of inflationary expectations, 50, Summers, L., 146, 164, 187, 21711 215; Federal Reserve control over, Supply function: estimated, 219-20, 117-29; net of taxes, 163-64 234; Lucas type, 51-53, 118, 221-22; Real wages: and elasticity of labor sup- exogenous shocks to, as generator of ply, 3; and implicit employment con- business cycles, 178-84, 253-54. See tracts, 179; indexation of, 211; pro- also Output equation cyclical movement of, 179-80 Reder, M., 179x1 Taxes: real effects of, 2; effect of, on Rental price of capital: defined, 177; real interest rates, 124-25, 163-64; and marginal product of capital, 175 and interaction with inflation, 124- Ricardo, D., 156-57 25, 217-18, 263; as a stabilization Risk aversion, 215-16 policy tool, 185-89, 222; and Propo- Risk premium, 80-81, 103-4 sition 13, 204 Rush, Mark, 1, 17-18 Taylor, John B., 14, 50, 53n, 81, 102, 119, 186, 191-94, 206, 221n? 22311 Saddle point property, 87 Time inconsistency, 170 Samuelson, P., 165 Townsend, R. M., 265-66 Sandmo, A., 18511 Tullock, G., 244 Sargent, T. J., 10-11, 15, 50, 52, 55-56, Two-stage least squares, 27, 77 62, 71, 7811, 82, 100, 102, 118, 131, 134, 136, 140, 153, 183, 203, 206, Unanticipated money changes: defined, 211, 222-23, 22511, 236, 241, 266 82; measured, 24; real effects of, 1-2, Sayers, R., 224 27; effects on price level, 82-100; and Schwartz, A., 47n, 154, 159, 224n, 227, nonneutrality of money, 218-33, 242 243-44 Schwert, G. W., 2511, 147, 161 Unemployment insurance, 222 Serial correlation: and gradual adjust- Unemployment rate equation, 25, 33- ment, 15, 171, 183-84, 193; in esti- 36, 39-48 mation procedures, 35, 37, 70, 192 Utility function, 174, 178, 194, 215 Sheshinski, E., 164, 187 Shiller, Robert J., 2, 18 Variance hypothesis: defined, 12; and Sidrauski, M., 21511 non-market-clearing models, 16; and Siegel, J. J., 14411 rational expectations, 17 Simons, H. C., 23011 Sims, C. A., 104-5, 149, 153, 172 Wage indexation, 21 1 Simultaneity problem, 30, 126. See also Wagner, R. E., 2091-1 Identification problems Wallace, Neil, 10-11, 50, 55-56, 62, 71, Small, D. H., 15, 222 82, 118, 131, 134, 140, 206, 211, Solow, Robert M., 2, 20, 114, 190, 195, 21511, 22511, 241, 266-67 244, 283 Wallis, K. F., 100, 104n Stability conditions, 86 Wealth, in aggregate demand, 76-81 Stagflation, effects of, 203-6 Weintraub, Robert, 18, 63-70, 195, 208, Startz, R., 216 283 Statistical exogeneity, 77, 100, 105 Welfare economics, first theorem of, Stiglitz, J. E., 253, 256, 258 185 Stock market: and value of wealth, 76- Wholesale price index, for fuels, 252 78; and reaction to Wicksell, K., 157, 163 chaages, 89-100 Wicksell effect, 157 Structural models and policy invariance, Willes, Mark, 19, 238-41 75-100 Wyplosz, C., 75, 7611, 103, 10511, 107