Studies the extent to which corporate information senders develop reputations for truthful reporting. Reputation formation; Incentives for voluntary dissemination of information; Buyers' forecasting and bidding strategies.

[This paper presents the results of an experiment designed to investigate the extent to which information senders develop reputations for truthful reporting. The results indicate that senders were more likely to report truthfully when their misrepresentations imposed costs on the receivers of their reports. With repeated interactions, receivers of the reports were able to discern the sender's reporting strategies, but provided no economic reward for truthfulness.]

The mechanisms governing the relationship of money, prices and interest rates to the business cycle are the most studied and most disputed topics in macroeconomics. In this paper, we first document key empirical aspects of this relationship. We then ask how well three benchmark rational expectations macroeconomic models-a real business cycle model, a sticky price model and a liquidity effect model-account for these central facts. While the models have diverse successses and failures, none can account for the fact that real and nominal interest rates are "inverted leading indicators " of real economic activity. That is, none of the models captures the post-war U.S. business cycle fact that a high real or nominal interest rate in the current quarter predicts a low level of real economic activity two to four quarters in the future. Robert G. King and Mark W. Watson* In exploring the predictions of these models, we take the stock of money to be one of several exogenous variables in the system. All of our models are capable of generating a forecasting role for money relative to real economic activity, similar to that found in the U.S. data. In the real business model, monetary changes can forecast real activity because productivity is related to many underlying sources of shocks and because these real shocks also affect the money stock. In the models with "sticky prices " and "liquidity effects" I.