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The Role of Real Wage Rigidity and Labor Market Frictions for Unemployment and Inflation Dynamics
Christoffel, Kai Philipp - 2006
employment and hours affecting inflation dynamics via marginal costs. We find that the response of unemployment and inflation to … persistent movements of aggregate inflation. Moreover, the impact of a monetary policy shock on unemployment and inflation …
Persistent link: https://www.econbiz.de/10012783591
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Deflationary Financial Shocks and Inflationary Uncertainty Shocks : An SVAR Investigation
De Santis, Roberto A.; Van der Veken, Wouter - 2022
What are the economic implications of financial and uncertainty shocks? We show that financial shocks cause a decline in output and goods prices, while uncertainty shocks cause a decline in output and an increase in goods prices. In response to un-certainty shocks, firms increase their markups,...
Persistent link: https://www.econbiz.de/10014076665
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Ramsey Monetary Policy With Labour Market Frictions
Faia, Ester - 2007
unemployment/inflation trade-off. In response to productivity shocks optimal policy is pro-cyclical when the worker's bargaining … incentive to increase vacancy profitability by reducing the interest rate and increasing inflation. The opposite is true when … the workers' share of surplus is high. This implies that optimal inflation volatility is U-shaped with respect to workers …
Persistent link: https://www.econbiz.de/10012778042
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Optimal Monetary Policy, Asset Purchases, and Credit Market Frictions
Schabert, Andreas - 2014
This paper examines how credit market frictions affect optimal monetary policy and if there is a role for central bank asset purchases. We develop a sticky price model where money serves as the means of payment and ex-ante identical agents borrow/lend among each other. The credit market is...
Persistent link: https://www.econbiz.de/10013045600
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Financial Market Frictions in a Model of the Euro Area
Lombardo, Giovanni - 2012
We build a model of the euro area incorporating financial market frictions at the level of firms and households. Entrepreneurs borrow from financial intermediaries in order to purchase business capital, in the spirit of the 'financial accelerator' literature. We also introduce two types of...
Persistent link: https://www.econbiz.de/10013111006
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The European Monetary Union as a commitment device for new EU member states
Ravenna, Federico - 2005
credibility a pegged exchange rate regime yields a lower loss compared to an inflation targeting policy, even if this policy … for a policy-maker to adopt inflation targeting over a strict exchange rate targeting regime. Full credibility is not a … precondition, but exposure to foreign and financial shocks and high steady state inflation make joining the EMU relatively more …
Persistent link: https://www.econbiz.de/10011604562
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What is global excess liquidity, and does it matter?
Rüffer, Rasmus; Stracca, Livio - 2006
This paper endeavours to provide a comprehensive analysis of the nature and the possible importance of “global excess liquidity”, a concept which has attracted considerable attention in recent years. The contribution of this paper is threefold. First, we present some conceptual discussion on...
Persistent link: https://www.econbiz.de/10011604742
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Openness and Optimal Monetary Policy
Lombardo, Giovanni - 2010
We show that the composition of imports has important implications for the optimal volatility of the exchange rate. Using input-output data for 25 countries we document substantial differences in the import and non-tradable content of final demand components, and in the role played by imported...
Persistent link: https://www.econbiz.de/10013135279
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Financial Frictions and Optimal Monetary Policy in an Open Economy
Kolasa, Marcin - 2011
A growing number of papers have studied positive and normative implications of financial frictions in DSGE models. We contribute to this literature by studying the welfare-based monetary policy in a two-country model characterized by financial frictions, alongside a number of key features, like...
Persistent link: https://www.econbiz.de/10013125365
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Monetary Policy Shocks in a Two-Sector Open Economy : An Empirical Study
Llaudes, Ricardo - 2007
This paper studies the effects and the transmission mechanism of unexpected monetary policy shocks in an open economy setting within the context of a VAR frame-work. It considers an economy with two sectors, a tradable sector and a non-tradable sector. For a given country, economic sectors are...
Persistent link: https://www.econbiz.de/10012776366