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The role of money in a business cycle model

Kydland, Finn E. - Federal Reserve Bank of Minneapolis - 1989

Two mechanisms are considered through which money can play a role in a real business cycle model. One is in the form of … money and leisure. This mechanism leads to price fluctuations even when the nominal money stock does not fluctuate. As is …

Persistent link: https://www.econbiz.de/10005372851

Electronic money: the end of inflation?

Marimon, Ramon; Nicolini, Juan Pablo; Teles, Pedro - Federal Reserve Bank of Minneapolis - 1997

We study economies where government currency and electronic money, drawn from interest bearing deposits in private … policies, and the legal restrictions in the form of reserve requirements on financial intermediaries. Electronic money … maximizes households preferences, in which case, electronic money competition may either have no role, or weaken the incentive …

Persistent link: https://www.econbiz.de/10005372836

The syndrome of exchange-rate-based stabilizations and the uncertain duration of currency pegs

Mendoza, Enrique G.; Uribe, Martin - Federal Reserve Bank of Minneapolis - 1997

This paper shows that some key stylized facts of exchange-rate-based stabilization plans can be explained by the uncertain duration of the plans themselves. Uncertain duration is modeled to reflect evidence showing that devaluation probabilities are higher when the plans are introduced and...

Persistent link: https://www.econbiz.de/10005372855

Seigniorage and the welfare cost of inflation: evidence from an intertemporal model of money and consumption

Eckstein, Zvi; Leiderman, Leonardo - Federal Reserve Bank of Minneapolis - 1991

relations between consumption, money holdings, inflation and assets’ returns using quarterly data for the high-inflation economy … in Israel, 1970–1988. The model considered includes money in agents’ utility function. A set of the estimated parameters …

Persistent link: https://www.econbiz.de/10005712951

Search, money, and inflation under private information

Ennis, Huberto M. - Federal Reserve Bank of Minneapolis - 2004

general, the model has a monetary steady state in which only a proportion of the agents hold money. Agents who do not hold … money cannot participate in trade in the decentralized market. The proportion of agents holding money is endogenous and …

Persistent link: https://www.econbiz.de/10004993854

Fiscal spending shocks, endogenous government spending, and real business cycles

Ambler, Steve; Paquet, Alain - Federal Reserve Bank of Minneapolis - 1994

We analyze a real business cycle model in which the government optimally chooses public investment and nonmilitary current expenditures, to maximize the welfare of the representative private agent. We characterize the optimal response of endogenous spending to shocks to technology and to...

Persistent link: https://www.econbiz.de/10005372791

A business cycle model with nominal wage contracts and government

Cho, Jang-Ok; Phaneuf, Louis - Federal Reserve Bank of Minneapolis - 1993

We incorporate nominal wage contracts and government into a quantitative general equilibrium framework. Thus, our model includes three types of shocks: a fiscal shock, a monetary shock, and a technology shock. We show that it is possible in this type of environment to generate a low correlation...

Persistent link: https://www.econbiz.de/10005372795

Seasonality and equilibrium business cycle theories

Braun, R. Anton; Evans, Charles L. - Federal Reserve Bank of Minneapolis - 1991

Barksy-Miron [1989] find that the postwar U.S. economy exhibits a regular seasonal cycle, as well as the business cycle phenomenon. Are these findings consistent with current equilibrium business cycle theories as surveyed by Prescott [1986]? We consider a dynamic, stochastic equilibrium...

Persistent link: https://www.econbiz.de/10005372801

Productive externalities and business cycles

Baxter, Marianne; King, Robert G. - Federal Reserve Bank of Minneapolis - 1991

This paper begins with the observation that the volatility of factor input growth is insufficient to explain the volatility in the growth rate of output, and explores the empirical plausibility of the hypothesis that this fact is due to the presence of productive externalities and increasing...

Persistent link: https://www.econbiz.de/10005372804

Business cycles and the asset structure of foreign trade

Baxter, Marianne; Crucini, Mario J. - Federal Reserve Bank of Minneapolis - 1992

Since the primary role of international financial linkages is to facilitate consumption smoothing in the face of country-specific shocks, the degree of international financial integration should play an important role in the international transmission of business cycles. This paper therefore...

Persistent link: https://www.econbiz.de/10005372810