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Bloom, Nicholas; Floetotto, Max; Jaimovich, Nir; … - London School of Economics (LSE) - 2013

We propose uncertainty shocks as a new shock that drives business cycles. First, we demonstrate that microeconomic uncertainty is robustly countercyclical, rising sharply during recessions, particularly during the Great Recession of 2007-2009. Second, we quantify the impact of time-varying...

Persistent link: https://www.econbiz.de/10010884626

Inflation persistence when price stickiness differs between industries

Sheedy, Kevin D. - London School of Economics (LSE) - 2007

There is much evidence that price-adjustment frequencies vary widely across industries. This paper shows that inflation … variables affecting inflation. Differences in the frequency of price adjustment mean that the pool of firms which responds to … has dissipated, making inflation persistence much harder to explain. …

Persistent link: https://www.econbiz.de/10010928616

Sorting and decentralized price competition

Eeckhout, Jan; Kircher, Philipp - London School of Economics (LSE) - 2010

Econometrica publishes original articles in all branches of economics - theoretical and empirical, abstract and applied, providing wide-ranging coverage across the subject area. It promotes studies that aim at the unification of the theoretical-quantitative and the empirical-quantitative...

Persistent link: https://www.econbiz.de/10010744934

Is numérairology the future of monetary economics?: unbundling numéraire and medium of exchange through a virtual currency and a shadow exchange rate

Buiter, Willem H. - London School of Economics (LSE) - 2007

The paper discusses some fundamental problems in monetary economics associated with the determination and role of the numéraire. The issues are introduced by formalising a proposal, attributed to Eisler, to remove the zero lower bound on nominal interest rates by unbundling the numéraire and...

Persistent link: https://www.econbiz.de/10010745586

The unemployment volatility puzzle: is wage stickiness the answer?

Pissarides, Christopher - London School of Economics (LSE) - 2007

I study the cyclical behavior of an equilibrium search model with endogenous job creation and destruction, with focus the model’s failure to match the observed cyclical volatility of unemployment.. Job creation in the model is influenced by wages in new matches. I summarize microeconometric...

Persistent link: https://www.econbiz.de/10010745651

The elusive costs and the immaterial gains of fiscal constraints

Canova, Fabio; Pappa, Evi - London School of Economics (LSE) - 2004

We study whether fiscal restrictions affect volatilities and correlations of macrovariables and the probability of excessive debt for a sample of 48 US states. Fiscal constraints are characterized with a number of indicators and volatility and correlations are computed in several ways. The...

Persistent link: https://www.econbiz.de/10010745871

Sales and monetary policy

Guimaraes, Bernardo; Sheedy, Kevin D. - London School of Economics (LSE) - 2008

A striking fact about prices is the prevalence of ``sales'': large temporary price cuts followed by a return exactly to the former price. This paper builds a macroeconomic model with a rationale for sales based on firms facing consumers with different price sensitivities. Even if firms can vary...

Persistent link: https://www.econbiz.de/10010746197

Trade and uncertainty

Novy, Dennis; Taylor, Alan M. - London School of Economics (LSE) - 2014

We offer a new explanation as to why international trade is so volatile in response to economic shocks. Our approach combines the uncertainty shock idea of Bloom (2009) with a model of international trade, extending the idea to the open economy. Firms import intermediate inputs from home or...

Persistent link: https://www.econbiz.de/10011125941

Have the US macro-financial linkages changed? the balance sheet dimension

Gerba, Eddie - London School of Economics (LSE) - 2014

We establish a set of US stylized facts on prices, quantities and balance sheets, assess the consistency of the current generation of financial DSGE models to these, and provide guidance on the challenges ahead. We mainly find four aspects which future financial friction models should take into...

Persistent link: https://www.econbiz.de/10011126533

Intrinsic inflation persistence

Sheedy, Kevin D. - London School of Economics (LSE) - 2007

It is often argued that the New Keynesian Phillips curve is at odds with the data because it cannot explain inflation … persistence — the difficulty of returning inflation immediately to target after a shock without any loss of output. This paper …

Persistent link: https://www.econbiz.de/10011071287