Are Prices Countercyclical? Evidence From the G-7

IMF Working Papers, August 1, 1994

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Are Prices Countercyclical? Evidence From the G-7

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Bibliographic details

• Authors: Eswar S Prasad, Bankim Chadha
• Published: August 1, 1994
• Series: IMF Working Papers

Main findings

• The price level is countercyclical in the authors' postwar quarterly sample for the G-7.
• The inflation rate is procyclical in the same sample.
• The results emphasize the importance of distinguishing between inflation and the cyclical component of the price level when reporting and interpreting stylized facts about business cycles.

Data and empirical approach

• Study based on postwar quarterly data for the G-7.
• Keywords indicating methods and variables examined include: HP filter, HP-filtered output, HP-filtered price, inflation rate, inflation-output correlation, price-output correlation, aggregate price level.

Thematic scope and subjects

• Subjects: 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.