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The optimal inflation rate and firm-level productivity growth

Weber, Henning - 2012

Empirical data show that firms tend to improve their ranking in the productivity distribution over time. A stickyprice model with firm-level productivity growth fits this data and predicts that the optimal long-run inflation rate is positive and between 1.5% and 2% per year. In contrast, the...

Persistent link: https://www.econbiz.de/10010286841

Identification of animal spirits in a bounded rationality model: An application to the euro area

Jang, Tae-Seok; Sacht, Stephen - 2012

In this paper we empirically examine a heterogenous bounded rationality version of a hybrid New-Keynesian model. The model is estimated via the simulated method of moments using Euro Area data from 1975Q1 to 2009Q4. It is generally assumed that agents' beliefs display waves of optimism and...

Persistent link: https://www.econbiz.de/10010290034

Trend growth and learning about monetary policy rules

Tesfaselassie, Mewael F. - 2011

The paper examines the effect of trend productivity growth on the determinacy and learnability of equilibria under alternative monetary policy rules. It shows that under a policy rule that responds to current period inflation and the output gap a higher trend growth rate relaxes the conditions...

Persistent link: https://www.econbiz.de/10010279379

Liquidity Traps, Learning and Stagnation

Evans, George W.; Guse, Eran; Honkapohja, Seppo - 2007

We examine global economic dynamics under learning in a New Keynesian model in which the interest-rate rule is subject to the zero lower bound. Under normal monetary and fiscal policy, the intended steady state is locally but not globally stable. Large pessimistic shocks to expectations can lead...

Persistent link: https://www.econbiz.de/10010260581

Is forward-looking inflation targeting destabilizing? The role of policy's response to current output under endogenous investment

Huang, Kevin X. D.; Meng, Qinglai - 2007

in response solely to future inflation induce real indeterminacy of equilibrium. Applying the Samuelson … by itself has a quantitatively negligible effect and almost all strict inflation-targeting rules lead to indeterminacy … stickiness, indeterminacy is much less likely to occur as policy also responds to output. With estimated labor supply elasticity …

Persistent link: https://www.econbiz.de/10010260586

Asymmetric Price Adjustment in the Small

Levy, Daniel C.; Chen, Haipeng (Allan); Ray, Sourav; … - 2007

Analyzing a large weekly retail transaction price dataset, we uncover a surprising regularity'small price increases occur more frequently than small price decreases for price changes of up to about 10 cents, while there is no such asymmetry for larger price changes. The asymmetry holds for the...

Persistent link: https://www.econbiz.de/10010260591

Confronting the representative consumer with household-size heterogeneity

Koulovatianos, Christos; Schröder, Carsten; Schmidt, Ulrich - 2010

Much analysis in macroeconomics empirically addresses economy-wide incentives behind consumer/investment choices by using insights from the way a single representative household would behave. Heterogeneity at the micro level can jeopardize attempts to back up the representative consumer...

Persistent link: https://www.econbiz.de/10010278011

Striking evidence: The impact of railway strikes on competition from intercity bus services in Germany

Beestermöller, Matthias Gerhard; Jessen-Thiesen, Levke; … - 2023

This paper investigates the impact of the largest rail strikes in German history on intercity buses - a then newly liberalised market. Using unique booking data of bus services, we exploit variation in rail service cancellations across routes to show that the disruption in rail transport...

Persistent link: https://www.econbiz.de/10014305038

Awareness of artificial intelligence: Diffusion of information about AI versus ChatGPT in the United States

Goel, Rajeev K.; Nelson, Michael A. - 2023

This paper addresses the awareness about the artificial intelligence across states in the United States. We uniquely create indices of Google internet search results for general AI awareness and about ChatGPT, normalizing alternatively by internet users and land area. An understanding of the...

Persistent link: https://www.econbiz.de/10014426889

Individual expectations and aggregate behavior in learning to forecast experiments

Hommes, Cars; Lux, Thomas - 2008

Models with heterogeneous interacting agents explain macro phenomena through interactions at the micro level. We propose genetic algorithms as a model for individual expectations to explain aggregate market phenomena. The model explains all stylized facts observed in aggregate price fluctuations...

Persistent link: https://www.econbiz.de/10010263533