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An Aggregate Demand - Aggregate Supply Analysis of Japanese Monetary Policy, 1973-1990
West, Kenneth D. - 1991
An aggregate demand - aggregate supply framework is used to analyze the effects of Japanese monetary policy, 1973:1-1990:8. It is found that money supply shocks contribute relatively little to output variability over the sample as a whole. Nor do these shocks seem to be particularly marked...
Persistent link: https://www.econbiz.de/10012475174
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A Note on Temporary Supply Shocks with Aggregate Demand Inertia
Caballero, Ricardo J.; Simsek, Alp - National Bureau of Economic Research - 2022
We study optimal monetary policy during temporary supply contractions when aggregate demand has inertia and expansionary policy is constrained. In this environment, it is optimal to run the economy hot until supply recovers. Positive output gaps in the low-supply phase lessen the negative output...
Persistent link: https://www.econbiz.de/10013172115
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The Anatomy of Sentiment-Driven Fluctuations
Acharya, Sushant - 2017
We characterize the entire set of linear equilibria of beauty contest games under general information structures. In particular, we focus on equilibria in which sentiments, that is self-fulfilling changes in beliefs that are orthogonal to fundamentals and exogenous noise, can drive aggregate...
Persistent link: https://www.econbiz.de/10012455545
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Nominal Wage Stickiness and Aggregate Supply in the Great Depression
Bernanke, Ben - 1996
Building on earlier work by Eichengreen and Sachs, we use data for 22 countries to study the role of wage stickiness in propagating the Great Depression. Recent research suggests that monetary shocks, transmitted internationally by the gold standard, were a major cause of the Depression....
Persistent link: https://www.econbiz.de/10012473425
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Temporary Price Changes and the Real Effects of Monetary Policy
Kehoe, Patrick J. - 2008
policy analysis, researchers should use a menu cost model like ours or at least a third, theory-based shortcut: set the Calvo …
Persistent link: https://www.econbiz.de/10012464255
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Changing Effects of Monetary Policy on Real Economic Activity
Friedman, Benjamin M. - 1990
Major changes have taken place in the U.S. economy within the past quarter century. Changes with implications that are at least potentially important for the effect of monetary policy on real economic activity include the elimination of Regulation Q interest ceilings and the development of the...
Persistent link: https://www.econbiz.de/10012475757
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Imperfect Information and Aggregate Supply
Mankiw, N. Gregory - 2010
This paper surveys the research in the past decade on imperfect information models of aggregate supply and the Phillips curve. This new work has emphasized that information is dispersed and disseminates slowly across a population of agents who strategically interact in their use of information....
Persistent link: https://www.econbiz.de/10012462878
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The Central Bank's Dilemma : Look Through Supply Shocks or Control Inflation Expectations?
Beaudry, Paul; Carter, Thomas J.; Lahiri, Amartya - National Bureau of Economic Research - 2023
When countries are hit by supply shocks, central banks often face the dilemma of either looking through such shocks or reacting to them to ensure that inflation expectations remain anchored. In this paper, we propose a tractable framework to capture this dilemma and explore optimal policy under...
Persistent link: https://www.econbiz.de/10014372498
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Uncertainty Shocks as Second-Moment News Shocks
Berger, David - 2017
shocks using methods from the news shocks literature, the analysis finds that innovations in realized stock market volatility … economy. Moreover, investors have historically paid large premia to hedge shocks to realized but not implied volatility. A … model in which fundamental shocks are skewed left can match those facts. Aggregate volatility matters, but it is the …
Persistent link: https://www.econbiz.de/10012453915
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Sticky Information in General Equilibrium
Mankiw, N. Gregory - 2006
This paper develops and analyzes a general-equilibrium model with sticky information. The only rigidity in goods, labor, and financial markets is that agents are inattentive, sporadically updating their information sets, when setting prices, wages, and consumption. After presenting the...
Persistent link: https://www.econbiz.de/10012466056