TY - BOOK ID - 84539454 TI - Are Prices Countercyclical? AU - Prasad, Eswar. AU - Chadha, Bankim. PY - 1992 SN - 1462341896 1455227315 1281993700 9786613794833 1455290769 PB - Washington, D.C. : International Monetary Fund, DB - UniCat KW - Inflation KW - Macroeconomics KW - Economic Theory KW - Price Level KW - Deflation KW - Business Fluctuations KW - Cycles KW - Agriculture: Aggregate Supply and Demand Analysis KW - Prices KW - Prices, Business Fluctuations, and Cycles: General (includes Measurement and Data) KW - Economic theory & philosophy KW - Economic growth KW - Supply shocks KW - Business cycles KW - Sticky prices KW - Economic theory KW - Supply and demand KW - United States UR - https://www.unicat.be/uniCat?func=search&query=sysid:84539454 AB - 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, can be misleading. A more appropriate procedure is to examine the correlations between the rate of inflation and the level of the cyclical component of output. In post-war U.S. data the correlations between similarly transformed price and output data are consistently and often strongly negative, as reported recently by a number of authors as evidence of countercyclical price behavior. The rate of inflation, however, is consistently and usually strongly positively correlated with various measures of the cyclical component of output. ER -