Showing papers by "Robert E. Lucas published in 2016"
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TL;DR: In this article, the authors compared moving averages of the three variables in question, using quarterly U.S. time-series for the period 1953-77, and found that a given change in the rate of change of the quantity of money induces an equal change in price inflation and an equal increase in nominal rates of interest.
Abstract: of two central implications of the quantity theory of money: that a given change in the rate of change in the quantity of money induces (i) an equal change in the rate of price inflation; and (ii) an equal change in nominal rates of interest. The illustrations were obtained by comparing moving averages of the three variables in question, using quarterly U.S. time-series for the period 1953-77. Readers may find the results of interest as additional confirmation of the quantity theory, as an example of one way in which the quantity-theoretic relationships can be uncovered via atheoretical methods from time-series which are subject to a variety of other forces, or as a measure of the extent to which the inflation and interest rate experience of the postwar period can be understood in terms of purely classical, monetary forces. The theoretical background of the study is reviewed, very briefly as it is familiar material, in the next section. The data processing methods are described and rationalized in Section II. The illustrations
519 citations
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TL;DR: In this article, the authors explore the long run demand for M1 based on a dataset comprising 31 countries since 1851, and find that for low-inflation countries the data often prefer the specification in the levels of velocity and the short rate originally estimated by Selden (1956) and LatanA© (1960) to either the log-log, or the semi-log ones.
Abstract: This paper explores the long-run demand for M1 based on a dataset comprising 31 countries since 1851. In many cases, co integration tests identify a long-run equilibrium relationship between either velocity and the short rate, or M1, GDP, and the short rate. Evidence is especially strong for the United States and the United Kingdom over the entire period since World War I, and for high-inflation countries such as Israel. For low-inflation countries the data often, prefer the specification in the levels of velocity and the short rate originally estimated by Selden (1956) and LatanA© (1960) to either the log-log, or the semi-log ones. This is especially clear for the United States. [Working Paper 22475]
23 citations
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TL;DR: This paper developed a theory of career paths and earnings in an economy in which agents organize in production hierarchies and showed that the increase in wage inequality over this period can be rationalized with a shift in the distribution in the complexity and profitability of technologies relative to the distribution of knowledge in the population.
Abstract: We develop a theory of career paths and earnings in an economy in which agents organize in production hierarchies. Agents climb these organizational hierarchies as they learn stochastically from other individuals. Earnings grow over time as agents acquire knowledge and occupy positions with larger numbers of subordinates. We contrast these and other implications of the theory with U.S. census data for the period 1990 to 2010. The model matches well the Lorenz curve of earnings as well as the observed mean experience-earnings profiles. We show that the increase in wage inequality over this period can be rationalized with a shift in the distribution of the complexity and profitability of technologies relative to the distribution of knowledge in the population.
17 citations
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TL;DR: In this paper, the authors explore the long-run demand for M1 based on a dataset comprising 31 countries since 1851 and find that the data often prefer the specification in the levels of velocity and the short rate originally estimated by Selden (1956) and Latane (1960) to either the log-log, or the semi-log ones.
Abstract: We explore the long-run demand for M1 based on a dataset comprising 31 countries since 1851. In many cases cointegration tests identify a long-run equilibrium relationship between either velocity and the short rate, or M1, GDP, and the short rate. Evidence is especially strong for the United States and the United Kingdom over the entire period since World War I, and for high-inflation countries such as Israel. For low-inflation countries the data often prefer the specification in the levels of velocity and the short rate originally estimated by Selden (1956) and Latane (1960) to either the log-log, or the semi-log ones. This is especially clear for the United States.Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.