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This paper presents a theory of the monetary transmission mechanism in a monetary version of Farmer’s (2009) model in which there are multiple equilibrium unemployment rates. The model has two equations in common with the new-Keynesian model; the optimizing IS curve and the policy rule. It...
Persistent link: https://www.econbiz.de/10008692320
channel through which monetary policy lowers the volatility of inflation and, even more importantly, output. …
Persistent link: https://www.econbiz.de/10005792383
competition to influence domestic inflation. By comparing the unrestricted and restricted specifications, we provide evidence that … foreign competition plays an important role in accounting for the behavior of inflation in the traded goods sector. Our … inflation in the 1990s. Our results also provide evidence against demand curves with a constant elasticity in the context of …
Persistent link: https://www.econbiz.de/10008558592
unemployment-inflation tradeoff might indicate not something to be exploited but instead only policy-makers' correctly …
Persistent link: https://www.econbiz.de/10005067633
concentrated in the second year after the shock. (2) Inflation responses are more varied. The median CPI inflation response peaks … consumer price inflation. Evidence of sustained inflation (as in the case of Germany) therefore must reflect a favorable … cumulative inflation and real growth responses, some countries such as Italy, France and Japan have fared well when faced with …
Persistent link: https://www.econbiz.de/10005661476
This paper explores the interrelation between the degree of unemployment persistence and the unemployment-productivity trade-off. The analysis suggests that the more effective are structural labour market policies (designed to change labour market institutions and laws, such as job security...
Persistent link: https://www.econbiz.de/10005662035
Since the 2008 global financial crisis, and after decades of relative neglect, the importance of the financial system and its episodic crises as drivers of macroeconomic outcomes has attracted fresh scrutiny from academics, policy makers, and practitioners. Theoretical advances are following a...
Persistent link: https://www.econbiz.de/10011213304
heterogeneity in wage rigidity, such as the persistence in price and the wage inflation, which a standard New Keynesian model with …
Persistent link: https://www.econbiz.de/10011249376
One of the central questions in recent macroeconomic history is to what extent monetary policy as opposed to oil price shocks contributed to the stagflation of the 1970s. Understanding what went wrong in the 1970s is the key to learning from the past. One explanation explored in Barsky and...
Persistent link: https://www.econbiz.de/10005016247
the absence of entry. Specifically, a long-run positive (negative) rate of inflation is optimal when the benefit of … by the desired markup. Plausible preference specifications and parameter values justify a long-run inflation rate of two …
Persistent link: https://www.econbiz.de/10009293666