Are Prices Countercvclical?: Evidence from the G-7

28 Pages Posted: 15 Feb 2006

See all articles by Bankim Chadha

Bankim Chadha

affiliation not provided to SSRN

Eswar S. Prasad

Cornell University - Dyson School of Applied Economics and Management; Cornell University - Department of Economics; Brookings Institution; NBER; IZA Institute of Labor Economics

Date Written: August 1994

Abstract

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.

JEL Classification: E31, E32

Suggested Citation

Chadha, Bankim and Prasad, Eswar S., Are Prices Countercvclical?: Evidence from the G-7 (August 1994). IMF Working Paper No. 94/91, Available at SSRN: https://ssrn.com/abstract=883828

Bankim Chadha (Contact Author)

affiliation not provided to SSRN

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Eswar S. Prasad

Cornell University - Dyson School of Applied Economics and Management ( email )

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HOME PAGE: http://prasad.aem.cornell.edu

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