Are Prices Countercyclical? Evidence From the G-7
August 1, 1994
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Summary
This paper re-examines the cyclical behavior of prices using postwar quarterly data for the G-7. We confirm recent evidence that the price level is countercyclical. However, we find strong evidence that the inflation rate is procyclical in our sample. Our results show the importance of making a clear distinction between inflation and the cyclical component of the price level when reporting and interpreting stylized facts regarding business cycles.
Subject: Business cycles, Cyclical unemployment, Economic growth, Inflation, Labor, Prices, Unemployment, Unemployment rate
Keywords: aggregate price level, Business cycles, correlation, countercyclical price behavior, Cyclical unemployment, HP filter, HP-filtered output, HP-filtered price, Inflation, inflation rate, inflation-output correlation, positive correlation, price, price cyclicality, price level, price-output correlation, Unemployment, Unemployment rate, WP
Pages:
28
Volume:
1994
DOI:
---
Issue:
091
Series:
Working Paper No. 1994/091
Stock No:
WPIEA0911994
ISBN:
9781451851472
ISSN:
1018-5941
Notes
Study based on postwar quarterly data for the G-7.
