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Paper

The Economic Sophistication of Public Opinion in the United States Sekhon, Jasjeet Uploaded 09-18-1997 Keywords Public Opinion Economic Sophistication Survey of Consumer Attitudes and Behavior (SCAB) Natural Rate of Unemployment NAIRU Unemployment Bootstrap Bootstrap Confidence Region Abstract I show that the public does indeed have coherent and sophisticated reactions to macroeconomic variables. These reactions are consistent with economic theory. Individuals form evaluations and expectations in a way which is sensitive to the complex trade-off between unemployment and inflation as determined by the nonaccelerating inflation rate of unemployment (NAIRU). The primary dataset used in this analysis has 69,680 observations and is compiled by merging 113 individual level ``Surveys of Consumer Attitudes and Behavior'' from 1976:01 to 1991:12. The data analysis makes extensive use of bootstrap methods to create confidence regions and to conduct hypothesis tests.

2

Paper

Precise, Second-Order Correct Estimates of the Natural Rate of Unemployment via Bootstrap Calibration Sekhon, Jasjeet Uploaded 09-11-1997 Keywords Natural Rate of Unemployment NAIRU Unemployment Bootstrap Calibration Confidence Interval Likelihood Marginal Likelihood Conditional Likelihood Profile Likelihood Abstract The natural rate of unemployment, which is usually considered to be the nonaccelerating inflation rate of unemployment (NAIRU), is an important and often used economic variable (Gordon 1997). In this paper I present second-order correct $O_{p}(n^{-2})$ confidence regions for estimates of the NAIRU, obtained via bootstrap calibration. These confidence regions are three times smaller than those provided in recent econometric work (Staiger, Stock and Watson 1997a, 1997b). The confidence regions are sufficiently precise to support use of the NAIRU for a variety of analytical and policy purposes, including monetary policy, as determined by a criterion suggested by Krueger (1997).