This paper studies a spatial model with delivered pricing to examine the relationship between the location of ®rms and their incentives to collude. Since location is an easily observable variable, this information could be of potential use to antitrust regulators. We ®nd that, given demand, a smaller ®rm dispersion is more likely to sustain tacit collusion. That is, the critical discount factor needed to sustain collusion, monotonically decreases as ®rms are located closer together. We also show that as demand increases, it is easier to sustain tacit collusion, given ®rm locations. The above results are in contrast to existing results regarding mill pricing in the context of product differentiation models.

It has often been reported that different demographic groups show persistent differences in their inflation expectations. Some reasonable explanations have been suggested, but most have failed to fully explain these apparent differences. We argue that the demographic differences have been overstated by using the mean to describe differences across demographic groups. When we use the median to describe inflation expectations, we find little meaningful difference across demographic groups.

The Median CPI is well-known as an accurate predictor of future infl ation. But it's just one of many possible trimmed-mean infl ation measures. Recent research compares these types of measures to see which tracks future infl ation best. Not only does the Median CPI outperform other trims in predicting CPI infl ation, it also does a better job of predicting PCE infl ation, the FOMC's preferred measure, than the core PCE.

This paper reinvestigates the performance of trimmed-mean infl ation measures some 20 years since their inception, asking whether there is a particular trimmedmean measure that dominates the median CPI. Unlike previous research, we evaluate the performance of symmetric and asymmetric trimmed-means using a well-known equality of prediction test. We fi nd that there is a large swath of trimmed-means that have statistically indistinguishable performance. Also, while the swath of statistically similar trims changes slightly over different sample periods, it always includes the median CPI-an extreme trim that holds conceptual and computational advantages. We conclude with a simple forecasting exercise that highlights the advantage of the median CPI (and trimmed-mean estimators in general) relative to other standard measures in forecasting headline infl ation.

Many adjustable rate mortgages in the United States are indexed to Libor. While the accuracy of this rate has recently been called into question, another issue affecting U.S. borrowers has become evident since the onset of the financial crisis. Specifically, many U.S. consumers with Libor-based loans may have been hit with substantially higher payments when their loans reset during the financial crisis than if those loans had been tied to a Treasury rate. We investigate several alternative reference rates for consumer loans and estimate their payment effects on a large sample of Libor-linked U.S. mortgages. We find that these alternatives would have delivered savings over Libor of about $25 to $45 per month and substantially more for mortgages that reset in October 2008.