{
  "title": "Are Prices Countercyclical?",
  "publication": "IMF Working Papers, October 1, 1992",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2016/12/30/are-prices-countercyclical-839",
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  "summary": "This paper examines the comovement of prices with the cyclical component of output. It argues that determining the cyclical behavior of prices by applying the same stationarity-inducing transformation to the levels of both output and prices, and examining the correlations of the resulting series, ca",
  "sections": [
    {
      "heading": "Objective and methodological critique",
      "content": "- Examines the comovement of prices with the cyclical component of output.\n- Argues that applying the same stationarity-inducing transformation to the levels of both output and prices and then examining correlations of the resulting series can be misleading.\n- Recommends a more appropriate procedure: examine the correlations between the rate of inflation and the level of the cyclical component of output."
    },
    {
      "heading": "Empirical findings (post-war U.S. data)",
      "content": "- Correlations between similarly transformed price and output data are consistently and often strongly negative; these negative correlations have been reported by a number of authors as evidence of countercyclical price behavior.\n- The rate of inflation is consistently and usually strongly positively correlated with various measures of the cyclical component of output."
    },
    {
      "heading": "Key concepts and variables emphasized",
      "content": "- rate of inflation\n- cyclical component of output (level)\n- similarly transformed price and output series (stationarity-inducing transformations)\n- aggregate demand, aggregate price level, demand-shift term, supply-shift term, equilibrium inflation rate, responsiveness parameter, sticky prices, supply shocks"
    },
    {
      "heading": "Publication metadata and identifiers",
      "content": "- Authors: Eswar S Prasad, Bankim Chadha\n- Date: October 1, 1992\n- Series: Working Paper No. 1992/088\n- Issue: 088\n- Volume: 1992\n- Pages: 37\n- DOI: https://doi.org/10.5089/9781451851076.001\n- Stock No: WPIEA0881992\n- ISBN: 9781451851076\n- ISSN: 1018-5941\n\nIMF Working Papers — Are Prices Countercyclical?\n\n---\n\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/30/are-prices-countercyclical-839"
    }
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    "Authors: Eswar S Prasad, Bankim Chadha",
    "Published: October 1, 1992",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781451851076.001",
    "Examines the comovement of prices with the cyclical component of output.",
    "Argues that applying the same stationarity-inducing transformation to the levels of both output and prices and then examining correlations of the resulting series can be misleading.",
    "Recommends a more appropriate procedure: examine the correlations between the rate of inflation and the level of the cyclical component of output.",
    "Correlations between similarly transformed price and output data are consistently and often strongly negative; these negative correlations have been reported by a number of authors as evidence of countercyclical price behavior.",
    "The rate of inflation is consistently and usually strongly positively correlated with various measures of the cyclical component of output.",
    "rate of inflation",
    "cyclical component of output (level)",
    "similarly transformed price and output series (stationarity-inducing transformations)",
    "aggregate demand, aggregate price level, demand-shift term, supply-shift term, equilibrium inflation rate, responsiveness parameter, sticky prices, supply shocks",
    "Authors: Eswar S Prasad, Bankim Chadha",
    "Date: October 1, 1992",
    "Series: Working Paper No. 1992/088",
    "Issue: 088",
    "Volume: 1992",
    "Pages: 37",
    "DOI: https://doi.org/10.5089/9781451851076.001",
    "Stock No: WPIEA0881992",
    "ISBN: 9781451851076",
    "ISSN: 1018-5941"
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