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Inflation Targeting and Q Volatility in Small Open Economies
McNelis, Paul D.; Lim, Guay C. - Econometric Society - 2004
This paper examines the welfare implications of managing Q with inflation targeting by monetary authorities who have to "learn" the laws of motion for both inflation and the rate of growth of Q. Our results show that the Central Bank can achieve great success in reducing the volatility of GDP...
Persistent link: https://www.econbiz.de/10005702704
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Market Institutions, Labor Market Dynamics, Growth and Productivity: Argentina
Sanchez, Gabriel; Butler, Ines - Econometric Society - 2004
This paper seeks to shed light on how manufacturing job flows and productivity in Argentina were affected during the 1990s by economic reforms in general and particularly by: a) financial shocks, b) labor reforms that change non-wage labor costs, c) trade reforms that alter tariff dispersion, d)...
Persistent link: https://www.econbiz.de/10005328896
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On-the-Job Search and Business Cycle Dynamics
Lubik, Thomas A.; Krause, Michael U. - Econometric Society - 2004
Recent research shows that observed labor market flows can be explained in search and matching models only by assuming either implausibly large productivity shocks (Hall 2003) or an excessively high degree of real wage rigidity even for new hires (Shimer 2003). If this is not the case, the...
Persistent link: https://www.econbiz.de/10005702652
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Inflation and Labor Market Flexibility: The Squeaky Wheel Gets the Grease
Panizza, Ugo; Loboguerrero, Ana Maria - Econometric Society - 2004
Inflation can “grease†the wheels of the labor market by relaxing downward wage rigidity but it can also increase uncertainty and have a negative “sand†effect. This paper studies the grease effect of inflation by looking at whether the interaction between inflation and labor...
Persistent link: https://www.econbiz.de/10005063561
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Monetary Policy and Labor Market Institutions
Faia, Ester; Haefke, Christian - Econometric Society - 2004
In this paper we study how differences in labor market institutions affect the impact of monetary policy on real activity for the U.S. and European countries. We model real shocks as changes in the separation rate of worker-firm matches which can be thought of as a labor demand shock. In...
Persistent link: https://www.econbiz.de/10005699674
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An Investigation of the Gains from Commitment in Monetary Policy
Tambalotti, Andrea; Schaumburg, Ernst - Econometric Society - 2004
degrees of credibility, in which commitment and discretion become special cases of what we call quasi commitment. The monetary … measure of the (lack of) credibility of the monetary policy authority, we investigate the welfare effect of a marginal … increase in credibility. Our main finding is that, in a simple model of the monetary transmission mechanism, most of the gains …
Persistent link: https://www.econbiz.de/10005702683
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Hump-shaped Behavior of Inflation and Dynamic Externality
Tsuruga, Takayuki - Econometric Society - 2004
This paper develops a model which can explain the hump-shaped impulse response of inflation to a monetary shock. A standard New Keynesian (NK) model is augmented so as to include dynamic externality with sticky wages and variable capital utilization. In our analysis, we assume purely...
Persistent link: https://www.econbiz.de/10005342361
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The impact of monetary policy on New Zealand business cycles and inflation variability
McLellan, Nathan; Buckle, Robert A; Kim, Kunhong - Econometric Society - 2004
This paper uses the open economy structural VAR model developed in Buckle, Kim, Kirkham, McLellan and Sharma (2002) to evaluate the impact of monetary policy on New Zealand business cycles and inflation variability and the output/inflation variability trade-off. The model includes a...
Persistent link: https://www.econbiz.de/10005130253
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Endogenous Fluctuations in Open Economies: the Perils of Taylor Rules Revisited
Airaudo, Marco; Zanna, Luis-Felipe - Econometric Society - 2004
Can active Taylor rules (i.e. monetary rules where the nominal interest rate responds more than proportionally to inflation) deliver global equilibrium uniqueness in small open economies? By studying the local and global dynamics of a standard small open economy we point out the misleading...
Persistent link: https://www.econbiz.de/10005699586
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Welfare Effects of Monetary Policy Rules in a Model with Nominal Rigidities and Credit Market Frictions
Paustian, Matthias - Econometric Society - 2004
This paper evaluates monetary policy rules in a business cycle model with staggered prices and wage setting a la Calvo and asymmetric information in the credit market. Rules are compared in a utility based welfare metric, the effects of the model’s nonlinear dynamics are captured by a...
Persistent link: https://www.econbiz.de/10005702718