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Dispersed information and the origins of aggregate fluctuations
Grazzini, Jakob; Massaro, Domenico - 2016
In the presence of dispersed information, agents may decide to take into account the actions of other agents because of the possible additional information conveyed by these actions. We call the act of using other agents' actions in the individual decision process social learning. This paper...
Persistent link: https://www.econbiz.de/10011489440
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Booms and busts with dispersed information
Benhima, Kenza - 2013
-and-bust dynamics start when firms are initially over-optimistic about demand due to an aggregate noise shock in their signals …
Persistent link: https://www.econbiz.de/10010223138
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Financial crisis and slow recovery with Bayesian learning agents
Horii, Ryo; Ono, Yoshiyasu - 2020
intuitive explanation of business cycle asymmetry and post-crisis slow recovery. When observing a liquidity shock, individuals …
Persistent link: https://www.econbiz.de/10012195742
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Consumer misperceptions, uncertain fundamentals, and the business cycle
Hürtgen, Patrick - 2011
This paper explores the importance of shocks to consumer misperceptions, or "noise shocks", in a quantitative business cycle model. I embed imperfect information as in Lorenzoni (2009) into a new Keynesian model with price and wage rigidities. Agents learn about the components of labor...
Persistent link: https://www.econbiz.de/10009748252
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Lumpy Investment in Sticky Information General Equilibrium
Verona, Fabio - 2013
In this paper, I introduce lumpy micro-level capital adjustment into a sticky information general equilibrium model. Lumpy adjustment arises because of inattentiveness in capital investment decisions instead of the more common assumption of non-convex adjustment costs. The model features...
Persistent link: https://www.econbiz.de/10013075606
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Rational Inattention and the Business Cycle Effects of Productivity and News Shocks
Maćkowiak, Bartosz; Wiederholt, Mirko - 2023
We solve a real business cycle model with rational inattention (an RI-RBC model). In the RIRBC model, the growth rates of employment, investment, and output are about as persistent as in the data, with an amount of inattention consistent with survey data on expectations. Moreover, consumption,...
Persistent link: https://www.econbiz.de/10014353582
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Government deficit shocks and Okun's coefficient volatility : new insights on the austerity versus growth debate
Binh Thai Pham; Sala, Hector - 2019
This paper connects two salient economic features: (i) Fiscal shocks have asymmetric effects across business cycle phases (Gechert et al., 2019); (ii) Okun's coefficient is time varying and may be unstable. The intertwined dynamic behavior of fiscal shocks and unemployment-output trade-offs are...
Persistent link: https://www.econbiz.de/10012054782
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Global shocks alert and monetary policy responses
Shobande, Olatunji Abdul; Shodipe, Oladimeji Tomiwa; … - 2019
The study examines the role of global predictors on national monetary policy formation for Kenya and Ghana within the New Keynesian DSGE framework. We developed and automatically calibrated our DSGE model using the Bayesian estimator, which made our model robust to rigorous stochastic number of...
Persistent link: https://www.econbiz.de/10012107801
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Opening the red budget box : nonlinear effects of a tax shock in the UK
Colombo, Valentina - 2020
This paper studies the real effects of an exogenous UK tax change in recessions and expansions. The tax shock is … regressions (Granger and Teräsvirta, 1994), tax policy shock is found to affect UK macroeconomic variables depending on the phase … of the business cycle the economy is when tax shock occurs. An exogenous tax cut in recessions triggers a large …
Persistent link: https://www.econbiz.de/10012164687
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Informality, labor regulation, and the business cycle
Leyva, Gustavo; Urrutia, Carlos - 2018
We analyze the joint impact of employment protection and informality on macroeconomic volatility and the propagation of shocks in emerging economies. For this, we propose a small open economy business cycle model with frictional labor markets, labor regulation, and an informal sector, modeled as...
Persistent link: https://www.econbiz.de/10012165940