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holds for the microeconomic response of some of the most important economic variables, such as investment, labor demand, and … actual response to shocks is less than half as fast as the estimated response. For investment, labor demand and prices, the …, even after aggregating investment across all establishments in U.S. manufacturing, the estimate of its speed of adjustment …
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We provide a continuous-time "risk-centric" representation of the New Keynesian model, which we use to analyze the interactions between asset prices, financial speculation, and macroeconomic outcomes when output is determined by aggregate demand. In principle, interest rate policy is highly...
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