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Nominal Rigidities and the Dynamic Effects of a Shock to Monetary Policy

Christiano, Lawrence J. - 2001

We present a model embodying moderate amounts of nominal rigidities which accounts for the observed inertia in inflation and persistence in output. The key features of our model are those that prevent a sharp rise in marginal costs after an expansionary shock to monetary policy. Of these...

Persistent link: https://www.econbiz.de/10012470317

Monetary Policy Shocks : What Have We Learned and to What End?

Christiano, Lawrence J. - 1998

This paper reviews recent research that grapples with the question: What happens after an exogenous shock to monetary policy? We argue that this question is interesting because it lies at the center of a particular approach to assessing the empirical plausibility of structural economic models...

Persistent link: https://www.econbiz.de/10012472408

Involuntary Unemployment and the Business Cycle

Christiano, Lawrence J. - 2010

We propose a monetary model in which the unemployed satisfy the official US definition of unemployment: they are people ….e., unemployment is 'involuntary'). We integrate our model of involuntary unemployment into the simple New Keynesian framework with no … capital and use the resulting model to discuss the concept of the 'non-accelerating inflation rate of unemployment'. We then …

Persistent link: https://www.econbiz.de/10012462849

The Effects of Monetary Policy Shocks : Some Evidence from the Flow of Funds

Christiano, Lawrence J. - 1994

sales and nonfinancial corporate profits as well as increases in unemployment and manufacturing inventories, (iii) they …

Persistent link: https://www.econbiz.de/10012474229

How Severe is the Time Inconsistency Problem in Monetary Policy?

Albanesi, Stefania - 2001

We analyze two monetary economies - a cash-credit good model and a limited participation model. In our models, monetary policy is made by a benevolent policymaker who cannot commit to future policies. We define and analyze Markov equilibrium in these economies. We show that there is no time...

Persistent link: https://www.econbiz.de/10012470590

Understanding the Fiscal Theory of the Price Level

Christiano, Lawrence J. - 2000

We review the fiscal theory of the price level. We place special emphasis on the theory's implications for the …

Persistent link: https://www.econbiz.de/10012471099

Sticky Price and Limited Participation Models of Money : A Comparison

Christiano, Lawrence J. - 1996

This paper provides new evidence that models of the monetary transmission mechanism should be consistent with at least the following facts. In response to a contractionary monetary policy shock, the aggregate price level responds very little, aggregate output falls, interest rates initially...

Persistent link: https://www.econbiz.de/10012473029

Expectation Traps and Discretion

Chari, V. V. - 1996

We argue that discretionary monetary policy exposes the economy to welfare-decreasing instability. It does so by creating the potential for private expectations about the response of monetary policy to exogenous shocks to be self-fulfilling. Among the many equilibria that are possible, some have...

Persistent link: https://www.econbiz.de/10012473315

Liquidity Effects and the Monetary Transmission Mechanism

Christiano, Lawrence J. - 1992

Several recent papers provide strong empirical support for the view that an expansionary monetary policy disturbance generates a persistent decrease in interest rates and a persistent increase in output and employment. Existing quantitative general equilibrium models, which allow for capital...

Persistent link: https://www.econbiz.de/10012475008

DSGE Models for Monetary Policy Analysis

Christiano, Lawrence J. - 2010

Monetary DSGE models are widely used because they fit the data well and they can be used to address important monetary policy questions. We provide a selective review of these developments. Policy analysis with DSGE models requires using data to assign numerical values to model parameters. The...

Persistent link: https://www.econbiz.de/10012462581