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This paper investigates the impact of public capital on private sector output by testing and estimating an aggregate production function for the U.S. economy over the postwar period augmented to include the stock of public capital as an additional factor input. We use patent applications to proxy for knowledge/technology stocks and adjust labor hours for changes in human capital or skill. Using Johansen's (1988 and 1991) multivariate cointegration analysis, we find a positive and significant long run effect of public capital, private capital, skilladjusted labor, and technology/ knowledge on p

We separate changes of the federal funds rate into two components; one reflects the Fed's superior forecasts about the state of the economy and the other component reflects the Fed's reaction to the public's forecast about the state of the economy. Romer and Romer (2000) found that the Fed reveals information about inflation when it tightens monetary policy. Their research has implications for measuring monetary policy as well. When the Fed raises short-term interest rates it leads to some combination of increased inflationary expectations and an increased real rate. In this paper we estimate a structural VAR that allows us to separate out (identify) components of federal funds changes that are due to inflationary expectations (thus neutral) and that part which is contractionary. Our measure of monetary policy is the part of federal funds changes that exclude the Fed's revelation of its asymmetric information about future inflation.

This Open Access Brief presents the KAPSARC Global Energy Macroeconometric Model (KGEMM). KGEMM is a policy analysis tool for examining the impacts of domestic policy measures and global economic and energy shocks on the Kingdom of Saudi Arabia. The model has eight blocks (real sector, fiscal, monetary, external sector, price, labor and wages, energy, population, and age cohorts) that interact with each other to represent the Kingdom's macroeconomy and energy linkages. It captures New Keynesian demand-side features anchored to medium-run equilibrium and long-run aggregate supply. It applies a cointegration and equilibrium correction modeling (ECM) methodology to time series data to estimate the model's behavioral equations in the framework of Autometrics, a general-to-specific econometric modeling strategy. Hence, the model combines 'theory-driven' approach with 'data-driven' approach. The Brief begins with an introduction to the theoretical framework of the model and the KGEMM methodology and then walks the reader through the structure of the model and its behavioral equations. The book closes with simulations showing the application of the model. Providing a detailed introduction to a cutting-edge, robust predictive model, this Brief will be of great use to researchers and policymakers interested in macroeconomics, energy economics, econometrics, and more specifically, the economy of Saudi Arabia.