Old Time Papers

Business Cycle Modeling without Pretending to Have Too Much A Priori Economic Theory

with Christopher Sims
1977
This paper is an out of print old timer. Several people asked me to put it on my webpage.

Is Keynesian Economics a Dead End?

October 1977
This paper is an old timer. It served as notes for my November 1977 talk to the Minnesota economics association. At those meetings, I saw my old undergraduate teacher Hyman Minsky for the first time since undergraduate days at Cal Berkeley.

Business Cycle Analysis with Unobservable Index Models and the Methods of the NBER

with Robert Litterman and Danny Quah
June, 1984
This is an unpublished paper about dynamic unobservable index models like the ones in the previous paper with Chris Sims.

Using Unobservable Index Models to Estimate Unobservables and Forecast Observables

with Robert Litterman and Danny Quah
April, 1984
This is another unpublished paper about dynamic unobservable index models..

Some of Milton Friedman’s Scientific Contributions to Macroeconomics

An assessment of the enduring influences of Milton Friedman’s work in macroeconomics.

The Timing of Tax Collections and the Structure of  "Irrelevance'' Theorems in a Cash-in-Advance Model: Vintage Article

with Bruce Smith
June 2009, Originally 1998
A standard timing protocol allows in a cash-in-advance model allows the government to elude the inflation tax. That matters. Altering the timing of tax collections to make the government hold cash overnight disables some classical propositions but enables others. The altered timing protocol loses a Ricardian proposition and also the proposition that open market operations, accompanied by tax adjustments needed to finance the change in interest on bonds due the public, are equivalent with pure units changes. The altered timing enables a Modigliani-Miller equivalence proposition that does not otherwise prevail.

Alternative Monetary Policies in a Turnpike Economy: Vintage Article

with Rodolfo Manuelli
June 2009
This paper modifies a Townsend turnpike model by letting agents stay at a location long enough to trade some consumption loans, but not long enough to support a Pareto optimal allocation. Monetary equilibria exist that are non-optimal in the absence of a scheme to pay interest on currency at a particular rate. Paying interest on currency at the optimal rate delivers a Pareto optimal allocation, but a different one than the allocation for an associated nonmonetary centralized economy. The price level remains determinate under an optimal policy. We study the response of the model to ``helicopter drops of currency, steady increases in the money supply, and restrictions on private intermediation.

Policy Rules for Open Economies

January 1998
Discussion of Laurence Ball

Wanting Robustness in Macroeconomics

with Lars Peter Hansen
June 10, 2000
This paper is a `nontechnical' (according to Hansen) survey of an approach to building a preference for robust decision rules into macroeconomics.