This paper investigates the sources and methods used to construct the aggregate data on consumer spending in the United States, searching especially for imperfections that may have implications for the outcome of empirical work. The paper identifies two such imperfections: sampling error and compositional error. It then presents several examples intended to illustrate that these imperfections may be empirically important and that appropriate remedies for them often can be devised. The paper concludes by suggesting some guidelines for empirical practice.

This paper examines the impact of changes in social security benefits on aggregate consumption expenditure. Under the null hypothesis, there should be no contemporaneous effect at the monthly frequency because increases in benefits have always been announced at least 6 weeks prior to payment. The paper develops overwhelming evidence--contrary to the null--that benefits have affected aggregate spending. The results have strong implications for several important issues, including Ricardian equivalence, government policy irrelevance, and the excess sensitivity of consumption to changes in income.

This paper analyzes dynamics of production and inventories at the General Motors Corporation during the 1920's and 1930's. We begin by examining anecdotal evidence on the nature of the production control system in force during that period. Motivated by that evidence, we then extend the conventional linear-quadratic model of production behavior to take account of annual shutdown. Finally, we apply the modified model to newly available data on monthly unit production, sales, and inventories during 1924-1940. GM appears to have been aiming to maintain a targeted level of inventory relative to expected sales and, secondarily, to smooth production.

This paper investigates the sources and methods used to construct the aggregate data on consumer spending in the United States, searching especially for imperfections that may have implications for the outcome of empirical work. The paper identifies two such imperfections: sampling error and compositional error. It then presents several examples intended to illustrate that these imperfections may be empirically important and that appropriate remedies for them often can be devised. The paper concludes by suggesting some guidelines of empirical practice. Copyright 1992 by American Economic Association.

This paper examines the impact of changes in social security benefits on aggregate consumption expenditure. Under the null hypothesis, there should be no contemporaneous effect at the monthly frequency because increases in benefits have always been announced at least 6 weeks prior to payment. The paper develops overwhelming evidence--contrary to the null--that benefits have affected aggregate spending. The results have strong implications for several important issues, including Ricardian equivalence, government policy irrelevance, and the excess sensitivity of consumption to changes in income.

This paper shows that in several U.S. manufacturing industries, the seasonal variability of production and inventories varies with the state of the business cycle. We present a simple model which implies that if firms reduce the seasonal variability of their production as the economy strengthens, and they either hold constant or increase the stock of inventories they bring into the high-production seasons of the year, then they must be facing upward-sloping and convex marginal cost curves. We conclude that firms in a number of industries face upward-sloping and convex marginal-production-cost curves.

In this paper, we use the relative moments in bank loans and commercial paper to provide evidence on the existence of a loan-supply channel of monetary-policy transmission. We find that tighter monetary policy leads to a shift in firms' mix of external financing: commercial paper issuance rises while bank loans fall. This suggests that contractionary policy can indeed reduce loan supply. Furthermore, such shifts in loan supply seem to affect investment, even controlling for interest rates and output.