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Open market operations as a monetary policy shock measure in a quantitative business cycle model

Heer, Burkhard; Schabert, Andreas - 2000

This paper presents a business cycle analysis of monetary policy shocks measured by disturbances to open market operations, i.e. the ratio of open market papers to non-borrowed reserves. We find empirical evidence for the usefulness of this policy measure, as it predicts significant declines in...

Persistent link: https://www.econbiz.de/10009780205

A Unified framework for using micro-data to compare dynamic wage and price setting models

Dixon, Huw - 2010

This paper develops a statistical framework of steady-state identities which enable us to match the distributions of durations found in the micro-data to generalized Taylor and Calvo models of time-dependent pricing. We illustrate the approach with the UK micro CPI data for 2006-2009, and employ...

Persistent link: https://www.econbiz.de/10003977346

Inflation and output dynamics in a model with labor market search and capital accumulation

Heer, Burkhard (contributor); Maußner, Alfred (contributor) - 2007

Persistent link: https://www.econbiz.de/10003498824

Optimal stabilization policy with flexible prices

Berentsen, Aleksander (contributor); … - 2005

We construct a dynamic stochastic general equilibrium model to study optimal monetary stabilization policy. Prices are fully flexible and money is essential for trade. Our main result is that if the central bank pursues a long-run price path, thereby controlling inflation expectations, it can...

Persistent link: https://www.econbiz.de/10003300933

Monetary policy and nominal rigidities under low inflation

Holden, Steinar - 2001

In most European countries, money wages are given in collective agreements or individual employment contracts, and the employer cannot unilaterally cut wages, even after the expiration of a collective agreement. Ceteris paribus, workers have a stronger bargaining position when they try to...

Persistent link: https://www.econbiz.de/10011398859

Monetary policy and the relative price of durable goods

Cantelmo, Alessandro; Melina, Giovanni - 2015

In a VAR model of the US, the response of the relative price of durables to a monetary contraction is either flat or mildly positive. It significantly falls only if narrowly defined as the ratio between new house and nondurables prices. These findings survive three identification strategies and...

Persistent link: https://www.econbiz.de/10010515460

A theory of price adjustment under loss aversion

Ahrens, Steffen; Pirschel, Inske; Snower, Dennis J. - 2014

We present a new partial equilibrium theory of price adjustment, based on consumer loss aversion. In line with prospect … theory, the consumers' perceived utility losses from price increases are weighted more heavily than the perceived utility … an otherwise standard dynamic neoclassical model of monopolistic competition. The resulting theory of price adjustment is …

Persistent link: https://www.econbiz.de/10010354159

Can fiscal policy help macroeconomic stabilisation? : evidence from a New Keynesian model with liquidity constraints

Muscatelli, V. Anton; Tirelli, Patrizio; Trecroci, Carmine - 2004

This paper derives a New Keynesian dynamic general equilibrium model with liquidity- constrained consumers and sticky prices. The model allows a role for both government spending and taxation in the DGE model. The model is then estimated using US data. We demonstrate that there seems to be a...

Persistent link: https://www.econbiz.de/10011402458

Estimated general equilibrium models for the evaluation of monetary policy in the US and Europe

Leith, Campbell B.; Malley, James R. - 2002

A persistent criticism of general equilibrium models of monetary policy which incorporate nominal inertia in the form of the New Keynesian Phillips Curve (NKPC) is that they fail to capture the extent of inflation inertia in the data. In this paper we derive a general equilibrium model based on...

Persistent link: https://www.econbiz.de/10011409738

Some evolutionary foundations for price level rigidity

Saint-Paul, Gilles - 2002

This paper shows that price rigidity evolves in an economy populated by imperfectly rational agents who experiment with alternative rules of thumb. In the model, firms must set their prices in face of aggregate demand shocks. Their payoff depends on the level of aggregate demand, as well as on...

Persistent link: https://www.econbiz.de/10011409938

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