Research Interests

I have three major areas of research interest. The first, inflation, focuses on international comparisons among inflationary and non-inflationary countries. The dynamics of inflation, in particular the process by which economic agents bring their monetary holdings to new equilibrium levels in response to either monetary or real shocks, and the influence upon aggregate demand of increment of borrowing from abroad and/or from the domestic banking system. The second is real exchange rates, particularly, the analysis of the forces determining the equilibrium real exchange rate in any given period. My work focuses on real forces, the thought being that monetary influences on real exchange rates are transitory, producing, in a sense, disequilibrium real rates. Fundamental forces are capital flows from (or to) abroad, changes in tariffs and other trade restrictions, changes in the relative prices of principal export and products in the world market, and rates of real cost reduction in the production of tradables and nontradables. The third area is the growth process. I have been developing, or at least implementing, methods of growth measurement based on capital theory rather than on production functions. One variant attributes to this year?s investment in a firm (or industry or branch) its most recent measured rate of return on its capital stock. Another variant attributes to the entity?s new investment a "normal rate of return" for the relevant time and place. Disaggregated measures of total factor productivity tend to support a vision of the world in which Schumpeterian "creative destruction" plays a major role.

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Primary Section

Section 54: Economic Sciences