the quantification of qualitative survey data a critical assessment abstract data obtained from business and consumer surveys are often used in forecasting models and in testing different expectation formation schemes their use however requires a previous step of transformation of the qualitative data into quantitative figures this paper contains a critical review of the different quantification methods highlighting the limits of their use in macroeconomic modelling

measuring inflation expectations a survey data approach expectations of inflation can be important determinants of actual inflation because they influence the process of wage bargaining price setting speculative buying and financial investing decisions englander and stone 1989 a central bank given its primary objective of price stability therefore takes a natural interest in inflationary expectations of economic agents in fact as illustrated by the theoretical work of e g kydland and prescott 1977 and barro and gordon 1983 inflationary expectations of the public are an important factor determining the success of the central bank in achieving its policy goal measures of inflation expectations can be used for monetary policy purposes for example as information variables in the sense defiined by friedman 1993 or as intermediate targets in the so called direct inflation targeting strategy svensson 1996 fuhrer 1997

essays on duopoly competition with asymmetric firms is profit maximization always an evolutionary stable strategy abstract we propose both a well mixed and spatially structured evolutionary game to analyze the competitive behavior of retail firms in duopolistic markets firms from two different populations high low efficiency compete and the available strategies are i profit or ii revenue maximization under bounded rationality assumptions firms can update their behavior through dynamic learning mechanisms in addition to a replicator dynamics approach we develop an agent based model to increase realism and to capture possible spatial effects on firms strategic behavior a convergence between the methods is observed and given specific conditions revenue maximization may corresponds to an evolutionary stable strategy ess

the consequences of minimum wage laws some new theoretical ideas economists generally agree that the effect of a binding minimum wage law is to move firms backward along the demand curve for low skill workers however this prediction of worker displacement depends critically on the assumption that the productivity of firms labor is not dependent on the wage in this paper we show that in a conventional efficiency wage model a minimum wage may increase the level of employment in low wage jobs the formal logic of our model is similar to the case of labor demand under monopsony but arises in a model with a large number of employers

uncovering financial market expectations of inflation this paper seeks to uncover market expectations of inflation from the joint dynamics of nominal interest rates and observed inflation i postulate 1 the existence of a stable vector autoregression in unobserved variables and 2 efficient financial markets the estimation procedure requires no further structural assumptions the econometrician need not observe all the information used by agents in forming forecasts or all the variables that influence real interest rates i find no empirical evidence that economic recessions are correlated with inflation forecast errors however postwar recessions are associated with ex ante real interest rates that are twice the postwar average

direct measurement of popular price expectations expectations are an important determinant of economic behavior the analysis of economic expectations however has suffered from inadequate measurement throughout the literature expectations have been treated as unobservable and have therefore been measured only indirectly the object of this paper is to develop and test a direct measure of the expectations of inflation a particularly critical economic variable a direct measure of inflationary expectations is here taken to be one constructed from a sample survey in which individuals are asked to state their expectations explicitly the paper focuses on a popular forecast of the rate of change of consumer prices in the forthcoming year as calculated from responses to the survey of consumer finances scf this measure is presented in section i the scf and others like it have existed for some time but a few recent studies notwithstanding most economists continue to regard survey measures as inherently unreliable their principal criticism is that the opinions an individual expresses

formation of inflation expectations in british manufacturing industries over the past decade increasing use has been made of direct information on price expectations in empirical studies of the expectations formation process in the united states livingston s inflation expectation series have been extensively analysed by turnovsky i970 turnovsky and wachter i972 pesando i975 mcguire i976 carlson i977 mullineaux i978 i980 jacobs and jones i980 figlewski and wachter i98i and others in the united kingdom the general public expectations of consumer prices made available in the gallup polls have been studied by carlson and parkin i975 holden and peel i977 smith i982 severn 1983 and evans and gulamani i984 similar studies have also been carried out with respect to surveys conducted in germany france and most other oecd countries however despite the apparent importance of businessmen s expectations for the understanding of the inflationary process the empirical research on inflation expectations in the united kingdom has been mainly concerned with the consumers price expectations the present paper is an attempt to rectify this shortcoming by extending the empirical analysis of the inflation expectation process to british manufacturing industries using the results of the industrial trend surveys conducted by the confederation of british industries cbi the plan of the paper is as follows section i deals with the methodological problems of deriving quantitative inflation expectations series from qualitative responses such as the ones reported in the cbi surveys the subjective probability method due to theil carlson and parkin and the regression method recently proposed by the author pesaran i984 for the conversion of categorical responses to quantitative measures are briefly discussed section ii sets out the alternative models of inflation expectations formation section iii describes the data on inflation expectations in british manufacturing industries and discusses the forecasting value of alternative measures of inflation expectations section iv focuses on the issue of measurement errors in expectations and the econometric problems involved section v reports the results of estimation of alternative models of inflation expectations and investigates the quantitative impact of government policy and general economic conditions on inflation

the effects of minimum wages on wage dispersion and employment evidence from the u k wages councils using data on wages council coverage from the united kingdom new earnings survey the authors examine the impact of mandated minimum wages on wage dispersion and employment in the united kingdom in the 1980s they find evidence that a dramatic decline in the toughness of the regulation imposed by the wages councils through the 1980s a decline that is in the level of the minimum wage relative to the average wage significantly contributed to widening wage dispersion over those years there is however no evidence of an increase in employment resulting from the weakening bite of the wages council minimum pay rates instead consistent with the conclusions of several recent u s studies the findings suggest that the minimum wage had either no effect or a positive effect on employment

quantification and characteristics of household inflation expectations in switzerland inflation expectations are a key variable in conducting monetary policy however these expectations are generally unobservable and only certain proxy variables exist such as surveys on inflation expectations this article offers guidance on the appropriate quantification of household inflation expectations in the swiss consumer survey where answers are qualitative in nature we apply and evaluate different variants of the probability approach and the regression approach we demonstrate that models that include answers on perceived inflation and allow for time varying response thresholds yield the best results and we show why the originally proposed approach of fluri and sporndli 1987 has resulted in heavily biased inflation expectations since the mid 1990s furthermore we discuss some of the key features of swiss household inflation expectations i e the fact that there has been a shift in expectation formation since 2000 expectations are better anchored and less adaptive and there is lower disa

long term impact of minimum wages on workers careers evidence from two decades of longitudinal linked employer employee data i acknowledge the support of the spanish ministry of the economy severo ochoa programme for centres of excellence in r d sev20150563 the aei spain and feder ue grant eco2016 76734 p

the welfare costs of union wage compression abstract this paper calculates the quantitative significance of the welfare costs of union wage compression this is done in a dynamic general equilibrium model with overlapping generations where agents choose both schooling human capital and assets physical capital the labor market in this model is characterized as a right to manage contract which allows unions to compress wage differentials between high and low skilled workers by implementing a binding minimum wage this paper shows that when labor markets are competitive even low levels of wage compression lead to large welfare losses since wage compression creates costly unemployment among low skilled workers the effect of wage compression on the supply of skilled labor however is rather small since the disincentive effect of a lower high skilled wage is to a large extent offset by a lower opportunity cost of schooling due to higher unemployment

imperfect information and dynamic conjectural variations this article analyzes oligopoly interaction in an environment where firms are imperfectly informed about the evolution of the market demand curve the analysis develops a two period cournot framework under the assumptions that demand shifts are positively serially correlated that firms never directly observe the demand curve and that firms never observe the previous quantity decisions of rivals firms do draw inferences about the position of the demand curve from past observations on prices consequently the current output of a firm will influence the current market price which will then influence rivals inferences about future demand the future output decisions of rivals will respond accordingly the theory predicts negative dynamic conjectural variations essentially a firm perceives that an increase in its output will lower the current market clearing price which will cause rival firms to think that the demand curve has shifted down and hence induce them to lower their outputs in the future

minimum wages in an equilibrium search model with diminishing returns to labor in production this article analyzes a minimum wage in a market with imperfect information and job search it establishes that employment effects of a minimum wage do not generally indicate welfare effects it shows that researchers interested in welfare consequences should ask two questions first is the existing minimum wage binding second do some firms that would be bound by a new minimum wage presently experience labor shortages if the answers to these questions are no and yes respectively this article supports the conclusion that a higher minimum wage is welfare improving regardless of its effect on the unemployment rate

integration cointegration and the forecast consistency of structural exchange rate models abstract we propose an alternative set of criteria for evaluating forecast rationality the forecast and the actual series 1 have the same order of integration 2 are cointegrated and 3 have a cointegrating vector consistent with long run unitary elasticity of expectations we denote forecasts that meet these criteria as consistent forecasts generated from monetary models generally pass 1 however using the johansen procedure cointegration fails to hold the longer the horizon of the cointegrated pairs 3 is not generally rejected using the horvath watson procedure imposing the unitary coefficient restriction we find fewer instances of consistency although a higher proportion of the cases of consistency are found at the longer horizons

modelling the general public s inflation expectations using the michigan survey data in this article we discuss a few models developed to explain the general public s inflation expectations formation and provide some relevant estimation results furthermore we suggest a simple bayesian learning model which could explain the expectations formation process on the individual level when the model is aggregated to the population level it could explain not only the mean values but also the variance of the public s inflation expectations the estimation results of the mean and variance equations seem to be consistent with the results of the questionnaire studies in which the respondents were asked to report their thoughts and opinions about inflation

observable contracts strategic delegation and cooperation the role of commitments in noncooperative games is well acknowledged and documented one way to achieve commitments is by letting delegates represent the players of a game in this paper the authors study a delegation game in which the players can use agents strategically to play on their behalf and the contracts they sign with them are common knowledge they show that in such cases every pareto optimal outcome of the game can become the unique subgame perfect nash equilibrium of the delegation game the authors demonstrate this result by discussing the cournot type duopolistic game copyright 1991 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

innovation inequality and intellectual property rights we examine whether income inequality explains innovation across countries the mechanism could be twofold first a large middle class could have an impact on institutions including intellectual property rights iprs which could in turn affect innovation second evidence from us economic history suggests direct linkages between middle class share and innovation via supply and demand effects using ive to address endogeneity we find that middle class share explains patterns of resident patenting while non resident patenting is driven more by exogenous factors and global integration our results illustrate an additional channel through which income inequality can impact long run growth

rising inequality changes in the distribution of income and consumption in the 1980s this paper examines changes in the distribution of income and consumption in the united states during the 1980s using data from the current population survey income and consumer expenditure survey consumption we reach three primary conclusions first changes in the distribution of consumption parallel changes in the distribution of income the lowest quintile of the consumption distribution received 0 9 percentage points less of total consumption in 1988 than in 1980 the corresponding decline for income was 0 6 percentage points second broad conclusions concerning recent changes in the consumption distribution are not very sensitive to the exact choice of a measure of family needs under a wide variety of alternative household equivalence scales there is a widening in the consumption distribution in the 1980s third the usc of consumption measures of well being in place of measures based on current money income docs change conclusions concerning the extent of poverty in the united stales using the official federal poverty thresholds we find that the overall consumption poverty rate was three percentage points below the income poverty rate in 1988 comparisons of the poverty rates of the elderly and the non elderly are substantially affected by the choice of poverty measure the consumption poverty rare for the elderly was only 60 percent of the rate for adults and one third of the rate for children in 1988 this abstract was borrowed from another version of this item

beyond myopic best response in cournot competition abstract the nash equilibrium as a prediction myopically ignores the possibility that deviating from the equilibrium could lead to an avalanche of beneficial changes by other agents we consider a non myopic version of cournot competition where each firm selects either profit maximization as in the classical model or revenue maximization by masquerading as a firm with zero production costs we consider many non identical firms with linear demand functions and show existence of pure nash equilibria that simple dynamics will produce such an equilibrium and that some natural dynamics converge within linear time furthermore we compare the outcome of the non myopic cournot competition with that of the standard cournot competition prices in the non myopic game are lower and the firms in total produce more and have a lower aggregate utility we also briefly consider a non myopic version of bertrand competition and find that prices increase relative to the classical model

formation of inflation expectations from the simple to the rational expectations hypothesis using quarterly survey expectational data for seven ec countries this paper tests how producers form their inflation expectations the results indicate that the simple expectational hypotheses do not give an adequate account of the variation in the price expectational data because they fail to allow for the information contained in forecast models of inflation however the producers generally do not incorporate disequilibrium inflation into their inflation expectations

does the european central bank have a credibility problem abstract using survey data we estimate private sector inflation expectations for the major european economies and find that euro area countries have experienced inflation expectations significantly above outcomes over the period since 1999 whilst the uk has not

good jobs bad jobs and redistribution we analyse the question of optimal taxation in a dual economy when the policy maker is concerned about the distribution of labour income income inequality is caused by the presence of sunk capital investments which creates a good jobs sector due to the capture of quasi rents by trade unions with strong unions and high planner preference for income equality the optimal policy is a combination of investment subsidies and progressive income taxation if unions are weaker the policy maker may instead choose to tax investment

stackelberg equilibria in managerial delegation games abstract managerial compensation packages do not only influence managers behavior but also have an impact on competing firms in a managerial delegation game investigating the latter aspect it is shown that the inherent prisoner s dilemma situation can be resolved without changing the normally studied setup or timing in the first stage owners choose an incentive function for their managers in the second stage they choose the weights assigned to that function besides profits and in the third stage managers play a cournot game solving this continuous optimization problem with the implicit function theorem shows that choosing an incentive from the set of multiplicative incentives i e any generalized affine transformation of the product of both firms quantities which includes e g relative profit ensures that the stackelberg outcome is among the set of equilibrium outcomes furthermore it is the unique outcome if the rival owner opts for one of the well known incentives like sales revenue or market share the general approach used allows demonstrating that with no other linear incentive a stackelberg outcome results and that incentives like profit to cost ratio should be avoided selecting a multiplicative incentive is a dominant strategy of the game

the carlson parkin method applied to nz price expectations using qsbo survey data abstract the standard carlson parkin economica 1975 42 123 138 method is used to estimate the parameters of producers prices expectations non nested tests suggest that the carlson parkin method is superior to the use of the simple balance statistic a non linear extension of the carlson parkin technique is estimated and no evidence is found to support the hypothesis that producers price expectations are drawn from skewed or kurtotic distributions

estimation of unobserved expected monthly inflation using kalman filtering hamilton developed a technique for estimating financial market expectations of inflation based on the observed time series properties of interest rates and inflation the technique is based on a state space representation derived from an underlying vector autoregressive process of the expected real interest rate and the expected inflation rate on lagged expectations and lagged values of the observed treasury bill rate and the actual inflation rate this article extends this work in two ways first we use monthly data since the quarterly data used by hamilton may obscure many interesting movements especially for determining the role of inflationary expectations in stock price movements and this is one of our primary interests second we employ an alternative method developed by burmeister and wall for estimating the parameters of the model and this method leads to a different identification proof both approaches share the use of the kalman filter to estimate the unobserved variables in this case e

a two factor model to combine us inflation forecasts the combination of individual forecasts is often a useful tool to improve forecast accuracy the most commonly used technique for forecast combination is the mean and it has frequently proved hard to surpass this study considers factor analysis to combine us inflation forecasts showing that just one factor is not enough to beat the mean and that the second one is necessary the first factor is usually a weighted mean of the variables and it can be interpreted as a consensus forecast while the second factor generally provides the differences among the variables and since the observations are forecasts it may be related with the dispersion in forecasting expectations and in a sense with its uncertainty within this approach the study also revisits friedman s hypothesis relating the level of inflation with expectations uncertainty at the beginning of the twenty first century

redistribution and affirmative action abstract the paper develops an integrated political economy model in which individuals are distinguished by earning ability and an ascriptive characteristic race the policy space is a transfer payment to low income workers financed by a flat tax on wages and an affirmative action constraint on firms hiring decisions the distribution of income and the policy are endogenous with the latter being the outcome of a legislative bargaining game between three legislative blocs the model provides support for the common claim that racial divisions reduce support for welfare expenditures even when voters have color blind preferences we show that relatively advantaged members of both the majority and minority group benefit from the introduction of a second dimension of redistribution while the less advantaged members of the majority are the principal losers

minimum wages and the incentives for skill formation we show that minimum wages may have beneficial effects on human capital allocation in a situation when the marginal product of skilled labor is shared between firm and worker according to bargaining strength firms prefer more productive workers to less p

inflation targeting a new framework for monetary policy he world s central bankers and their staffs meet regularly in venues from basle to washington to share ideas and discuss common problems perhaps these frequent meetings help explain why changes in the tactics and strategy of monetary policymaking such as the adoption of money growth targets in the 1970s the intensification of efforts to reduce inflation in the 1980s and the recent push for increased institutional independence for central banks tend to occur in many countries more or less simultaneously whatever their source major changes in the theory and practice of central banking are of great importance for both individual countries and the international economy in this article we discuss a new strategy for monetary policy known as inflation targeting which has sparked much interest and debate among central bankers and monetary economists in recent years this approach is characterized as the name suggests by the announcement of official target ranges for the inflation rate at one or more horizons and by explicit acknowledgment that low and stable inflation is the overriding goal of monetary policy other important features of inflation targeting include increased communication with the public about the plans and objectives of the monetary policymakers and in many cases increased accountability of the central bank

are the representative agent s beliefs based on efficient econometric models abstract no they are not at least not in the uk by examining gdp dynamics we find that over a time span of two decades an easy to perform adaptive expectations model systematically outperforms other standard predictors in terms of squared forecasting errors this should reduce model uncertainty and thereby lead to increased homogeneity in expectations however data collected in surveys show that great variety in expectations persists even in this situation moreover granger tests indicate that the forecasting fitness of the best predictor can be further enhanced by the use of information provided by survey expectations these results based on real time data and robust to both several predictors and nonlinearities weaken the general validity of approaches assuming predictions based on efficient econometric models

ambiguous changes in product quality economic goods are frequently sold according to a price per unit quantity where the quantity characteristic does not measure all the economically important characteristics of the good milk is sold by the quart automobiles rented by the mile physicians services bought by the visit and tennis lessons by the hour in all cases heterogeneous units are available in the market and the price per unit quantity depends upon the amount of the unpriced characteristic contained in each unit the per quart price of milk depends upon the butterfat content the mileage costs of automobile rentals on the cars make and the price per unit time for personal services on the providers skill and training the common distinction made between these variants of the same good is that they differ in quality where quality refers to the amounts of the unpriced attributes contained in each unit of the priced attribute thus milk is packaged according to the attribute milk liquid and the quality of milk refers to the ratio of butterfat per unit of liquid 2 this paper considers some of the unique aspects of the economics of supply and demand under this situation where products contain at least two desired attributes only one of which is quantified and measured prior to purchase product quality is here defined by the ratio of the second quality attribute per unit of the measured quantity attribute 3 this simple specification of quality allows a direct link between standard economic models of related products and the economics of variable product quality previous analyses which treat quality simply as a shift parameter in the demand function are shown to obscure the actual subtleties of supply and demand with variable endogenous quality 4 the paper proceeds by first examining the efficient quality and quantity and the competitive equilibrium the market equilibrium under monopoly is then contrasted in the second section the general theme of the

the strategic choice of managerial incentives do firms with separate owners and managers maximize profits we address this question for an oligopoly where managers compete in quantities or prices as in the cournot or bertrand models and owners choose their managers incentives we find that there is a strategic aspect in the problem of selecting incentives and that profit maximizing behavior does not result in particular in the oligopoly we study the behavior of firms competing in quantity price more closely resembles perfectly competitive collusive behavior than cournot bertrand behavior

do europeans view their homes as castles homeownership and poverty perception throughout europe the paper investigates the notion that homeownership affects poverty perception this is investigated by utilising a logit model to analyse various characteristics of homeowners in 11 different european nations overall the analysis fails to reject the notion that homeowners throughout europe are less likely to perceive themselves as living in poverty but no evidence is found that homeownership is more valued in nations with high owner occupancy rates however support is found for the notion that homeownership is used as a form of security in countries that experience greater income inequality

long run purchasing power parity revisited a monte carlo simulation the existence of long run purchasing power parity ppp implies that a cointegration vector of nominal exchange rate domestic price and foreign price is expected regardless of using the engle granger two step method or johansen maximum likelihood approach however this paper has found conflicting results the engle granger technique tends to reject the long run ppp hypothesis whereas the johansen method is generally supportive of long run ppp via monte carlo simulations the present paper finds that the johansen approach has a bias toward supporting long run ppp especially under the circumstances in which the assumption of normally or and independently and identically distributed disturbance terms is violated

the role of media for consumers inflation expectation formation the full information rational expectations model is clearly rejected by the data the expectation formation process has therefore important implications for macroeconomic outcomes we examine how consumers react to information provided by the media by taking into account that this information is imperfect we show that information rigidities play a role empirically intensive news reporting improves the accuracy of consumers inflation expectations because they receive more information however this effect depends on the tone of the news if news are badly toned the effect reverts

minimum wage unemployment and growth abstract this paper shows that in an overlapping generations model with endogenous growth minimum wage legislation does not necessarily has negative consequences on economic performance such legislation can have positive effects on growth by inducing more human capital accumulation more precisely a low demand for unskilled labor induced by a minimum wage may create an incentive for workers to accumulate human capital moreover it is possible that a decrease in the minimum wage lowers the welfare of each agent in the economy

internal or external devaluation what does the ec consumer survey tell us about macroeconomic adjustment in the euro area this paper explores the dynamics of national inflation expectations within the euro area during the recent crisis using the european commission s consumer survey we find that the strong anchoring of area wide inflation expectations which is typically found in the literature does not extend to individual member states we also measure the effect of the crisis on national inflation expectations using sovereign bond spreads and find that increases in sovereign risk have a significant negative effect on inflation expectations this suggests that consumers expect their country to adjust through a process of internal devaluation in contrast we find no evidence that tensions in the sovereign bond markets increase national inflation expectations as one would be expect under an exit or breakup scenario

a comparison of inflation forecasts interest rate models provide slightly better monthly forecasts and substantially better eight and fourteen month forecasts of inflation than a univariate time series model the livingston surveys underestimate eight and fourteen month inflation rates especially during the high inflation period of 1978 81 in contrast eight and fourteen month inflation forecasts extrapolated from one month interest rates show little bias and track ex post eight and fourteen month inflation rates better than the survey forecasts

an econometric model of u k manufacturing employment using survey data on expected output a model of u k manufacturing employment is estimated in which output expectations data are derived from confederation of british industry cbi survey information the output expectations terms are highly significant and equations including them encompass more traditional models that use current and lagged output in addition the equations also successfully predict the sharp falls in manufacturing employment that occurred after 1979 one interesting implication of these equations is that the decline in cyclically adjusted productivity around 1975 and the subsequent improvement around 1980 can be largely explained in terms of a prolonged period of over optimistic output expectations by u k firms

central wage setting under multiple technological equilibria a mechanism for equilibrium elimination instituting an initial round of centralized wage setting before an ultimate round of decentralized wage bargaining may actually raise employment a general multi equilibrium model is set up with strategic complementarities in the implementation of a new technology through aggregate demand spillovers in this model centralized wage setting to establish an outside option wage which is selectively binding on lo tech firms may achieve the big push to a hi tech general equilibrium with higher employment output wages and profits

implications for minimum wage policies of an s shaped labor supply curve abstract a model of family labor supply provides a rationale for raising minimum wages when the labor supply response is negative at low wages under those circumstances the labor market can be caught in a malthusian poverty trap of excess supply unemployment overextended workdays child labor and falling wages raising minimum wages may therefore help resorb this excess supply and stabilize the labor market setting a virtuous cycle in motion in a two sector context such a policy would increase wages in both the covered and uncovered sectors evidence from a study of costa rica in particular is consistent with those conclusions

expectations output and inflation the european experience abstract this paper introduces new measures of the mean and variance of inflation and growth expectations based on tendency survey data from four major european economies the expectations measures are technically irrational but more accurate than naive alternatives expectations errors do not persist for more than a year unexpected inflation and uncertainties about inflation and growth play the roles assigned them by new classical macroeconomic theory respectively raising and lowering real activity all the expectations uncertainties and errors appear more closely correlated across countries than experience would justify suggesting that unpredictable disturbances typically have an internal rather than an international origin

inflationary expectations and rationality abstract evidence of a cointegrating vector of 1 1 between actual and expected inflation rates supports the rational expectations hypothesis the paper also illustrates the caution one must exercise when applying modern time series econometrics techniques in finite samples

what do economists know an empirical study of experts expectations for more than three decades economic columnist joseph a livingston has canvassed a panel of economists twice a year eliciting their six month and twelve month forecasts for more than a dozen key variables this study analyzes whether the experts predictions are unbiased and whether complete use was made of all relevant known information unbiasedness and completeness being necessary conditions for fully rational expectations little bias was found in either the half year or full year predictions but extensive underutilization of information particularly data on monetary growth occurred to prophecy is extremely difficult especially with respect to the future chinese proverb do economists expectations regarding key price and nonprice variables utilize all known relevant information in an unbiased efficient manner this is a worthy subject for research for several reasons properties of experts predictions likely form an upper bound for those of laymen further as john muth 14 has noted the character of dynamic processes is typically very sensitive to the way expectations are influenced by the actual course of events p 316 hence we need to know precisely how events do affect expectations finally the common practice of replacing a variable s generally unobserved expectation with a proxy based on its past values will be unbiased and will not cause bias in other

inflation expectations revisited this paper describes the construction and main features of a new monthly time series for the mean and standard deviation of consumer inflation expectations in the united kingdom in the years 1961 85 based on a number of consumer surveys this involves generalizing to four and five category tendency survey data the method used by j a carlson and m parkin 1975 to quantify the results of a three category tendency survey of inflation expectations the new series exhibit very different time series properties from the original carlson parkin data copyright 1988 by the london school of economics and political science

the accuracy and rationality of uk inflation expectations some quantitative evidence 1987 the accuracy and rationality of uk inflation expectations some quantitative evidence applied economics vol 19 no 6 pp 819 828

on the benefits from rigid labour markets norms market failures and social insurance the common view that far reaching labour market deregulation is the only remedy for high european unemployment is too simplistic first the evidence suggests that deeply rooted social customs are