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Towards technology-news-driven business cycles
Di Casola, Paola; Sichlimiris, Spyridon - 2018
We identify an inflationary technology news shock as the leading source of business cycle variations for the postwar U.S. economy. This shock acts like a demand shock: it induces strong positive comovement in real quantities - GDP, consumption, investment - and weak positive comovement between...
Persistent link: https://www.econbiz.de/10011943330
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Optimal monetary policy with r* < 0
Billi, Roberto M.; Galí, Jordi; Nakov, Anton - 2024
We study the optimal monetary policy problem in a New Keynesian economy with a zero lower bound (ZLB) on the nominal interest rate, when the steady state natural rate (r*) becomes permanently negative. We show that the optimal policy aims to approach gradually a new steady state with positive...
Persistent link: https://www.econbiz.de/10014564038
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Gains from wage flexibility and the zero lower bound
Billi, Roberto; Galí, Jordi - 2019
adverse effects of greater wage flexibility on welfare when the central bank follows a conventional Taylor rule. When demand …We analyze the welfare impact of greater wage flexibility while taking into account explicitly the existence of the … shocks are the driving force, the presence of the ZLB implies that an increase in wage flexibility reduces welfare even under …
Persistent link: https://www.econbiz.de/10012182829
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Unemployment fluctuations and nominal GDP targeting
Billi, Roberto - 2020
I evaluate the welfare performance of a target for the level of nominal GDP in a New Keynesian model with unemployment … targeting, a conventional Taylor rule, and the optimal monetary policy with commitment. I find that employment targeting is …
Persistent link: https://www.econbiz.de/10012182847
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Five facts about the distributional income effects of monetary policy
Amberg, Niklas; Jansson, Thomas; Klein, Mathias; … - 2021
We use Swedish administrative individual-level data to document five facts about the distributional income effects of monetary policy. (i) The effects of monetary policy shocks are U-shaped with respect to the income distribution-i.e., expansionary shocks increase the incomes of high- and...
Persistent link: https://www.econbiz.de/10013162036
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Debt dynamics and monetary policy: A note
Laséen, Stefan; Strid, Ingvar - 2013
"Leaning against the wind" - a tighter monetary policy than necessary for stabilizing inflation around the inflation target and unemployment around a long-run sustainable rate - has been justified as a way of reducing household indebtedness. In a recent paper Lars Svensson claims that this...
Persistent link: https://www.econbiz.de/10010427086
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Business cycle implications of mortgage spreads
Walentin, Karl - 2014
How do aggregate quantities at the business cycle frequency respond to shocks to the spread between residential mortgage rates and government bonds? Using a structural VAR approach, we .nd that mortgage spread shocks impact the real economy by both economically and statistically signi.cant...
Persistent link: https://www.econbiz.de/10010427087
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Housing collateral and the monetary transmission mechanism
Walentin, Karl; Sellin, Peter - 2010
In this paper our main aim is to quantify the role that housing collateral plays for the monetary transmission mechanism. Furthermore, we want to explore the implications of the increase in household indebtedness, and specifically the loan-to-value ratio, in the last two decades. We set up a two...
Persistent link: https://www.econbiz.de/10010320736
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The output gap, the labor wedge, and the dynamic behavior of hours
Sala, Luca; Söderström, Ulf; Trigari, Antonella - 2010
We use a standard quantitative business cycle model with nominal price and wage rigidities to estimate two measures of economic ineffciency in recent U.S. data: the output gap - the gap between the actual and effcient levels of output - and the labor wedge - the wedge between households'...
Persistent link: https://www.econbiz.de/10010320744
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The effects of endogenous firm exit on business cycle dynamics and optimal fiscal policy
Vilmi, Lauri - 2011
. Technology shocks therefore have additional effects on household welfare relative to an economy with only endogenous entry … flexible. Third, we show that endogenous firm exit creates a new role for fiscal policy to increase efficiency and welfare by …
Persistent link: https://www.econbiz.de/10010320770