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The magnitude of the speculative motive for holding inventories in a real business cycle model

Christiano, Lawrence J.; Fitzgerald, Terry J. - Federal Reserve Bank of Minneapolis - 1989

The motive to hold inventories purely in the hope of profiting from a price increase is called the speculative motive … implication for how large it is quantitatively. This paper incorporates the speculative motive for holding inventories into an … of the speculative role for holding inventories in this model is quite small. This suggests the possibility that the …

Persistent link: https://www.econbiz.de/10005498988

(S,s) inventory policies in general equilibrium

Fisher, Jonas D.M.; Hornstein, Andreas - Federal Reserve Bank of Minneapolis - 1995

We study the aggregate implications of (S,s) inventory policies in a dynamic general equilibrium model. Firms in the model's retail sector face idiosyncratic demand risk, and (S,s) inventory policies are optimal because of fixed order costs. The model economy replicates salient features of the...

Persistent link: https://www.econbiz.de/10005498985

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

The cyclical behavior of job creation and job destruction: a sectoral model

Greenwood, Jeremy; MacDonald, Glenn M.; Zhang, Guang-Jia - Federal Reserve Bank of Minneapolis - 1994

Three key features of the employment process in the U.S. economy are that job creation is procyclical, job destruction is countercyclical, and job creation is less volatile than job destruction. These features are also found at the sectoral (goods and services) level. The paper develops,...

Persistent link: https://www.econbiz.de/10005372811

Employment and business cycle asymmetries: a data based study

Pfann, Gerard A. - Federal Reserve Bank of Minneapolis - 1991

Does the magnitude of a trough in employment differ from the magnitude of a peak in employment, and is the time employment spends in rising from a trough to a peak longer than the time spends in falling from a peak to a trough? In this paper we measure the “asymmetry of magnitudes” and the...

Persistent link: https://www.econbiz.de/10005372812

Staggered contracts and business cycle persistence

Huang, Kevin X. D.; Liu, Zheng - Federal Reserve Bank of Minneapolis - 1998

Staggered price and staggered wage contracts are commonly viewed as similar mechanisms in generating persistent real effects of monetary shocks. In this paper, we distinguish the two mechanisms in a general equilibrium framework. We show that, although the dynamic price setting and the dynamic...

Persistent link: https://www.econbiz.de/10005372818