Are Prices Countercyclical? Evidence From the G-7

Author/Editor:

Eswar S Prasad ; Bankim Chadha

Publication Date:

August 1, 1994

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

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.

Series:

Working Paper No. 1994/091

Subject:

Business cycles Cyclical unemployment Economic growth Inflation Labor Prices Unemployment Unemployment rate

Notes:

Study based on postwar quarterly data for the G-7.

English

Publication Date:

August 1, 1994

ISBN/ISSN:

9781451851472/1018-5941

Stock No:

WPIEA0911994

Pages:

28

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