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Learning and Judgment Shocks in U.S. Business Cycles
Murray, James - 2011
This paper examines the role of judgment shocks in combination with other structural shocks in explaining post …-war economic volatility within the context of a New Keynesian model. Agents form expectations using constant gain learning then … augment these forecasts with judgment. These judgments may be interpreted as a reaction to current news stories or policy …
Persistent link: https://www.econbiz.de/10013128990
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The (Ir)Relevance of Rule-of-Thumb Consumers for U.S. Business Cycle Fluctuations
Albonico, Alice; Haque, Qazi; Ascari, Guido - 2020
We estimate a medium-scale model with and without rule-of-thumb consumers over the pre-Volcker and the Great Moderation periods, allowing for indeterminacy. Passive monetary policy and sunspot fluctuations characterize the pre-Volcker period for both models. The estimated fraction of...
Persistent link: https://www.econbiz.de/10014090803
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Monetary policy regimes and the volatility of long-term interest rates
Queijo von Heideken, Virginia (contributor) - 2008
This paper addresses two important questions that have, so far, been studied separately in the literature. First, the paper aims at explaining the high volatility of long-term interest rates observed in the data, which is hard to replicate using standard macro models. Building a small-scale...
Persistent link: https://www.econbiz.de/10003651439
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Bad Luck, Bad Policy, and Learning? A Markov-Switching Approach to Understanding Postwar U.S. Macroeconomic Dynamics
Best, Gabriela - 2019
evolving beliefs—through a real-time learning process—aboutthe structure of the economy and shifts in policymakers' preferences … Moderation. We argue that the interplay between centralbank learning and a shift in policy makers' preferences explains movements … observe that a change in monetary policy objectives, assumptions about policymakers' learning process, and Markov …
Persistent link: https://www.econbiz.de/10012903175
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Inflation in the great recession and new keynesian models
Del Negro, Marco; Giannoni, Marc Paolo; Schorfheide, Frank - 2013
It has been argued that existing DSGE models cannot properly account for the evolution of key macroeconomic variables during and following the recent Great Recession, and that models in which inflation depends on economic slack cannot explain the recent muted behavior of inflation, given the...
Persistent link: https://www.econbiz.de/10009744674
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Changes in the Federal Reserve's inflation target : causes and consequences
Ireland, Peter N. (contributor) - 2005 - This version: August 2005
This paper estimates a New Keynesian model to draw inferences about the behavior of the Federal Reserve's unobserved inflation target. The results indicate that the target rose from 1-1/4 percent in 1959 to over 8 percent in the mid-to-late 1970s before falling back below 2-1/2 percent in 2004....
Persistent link: https://www.econbiz.de/10003230324
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US business cycle dynamics at the zero lower bound
Böhl, Gregor; Strobel, Felix - 2020
Using a nonlinear Bayesian likelihood approach that fully accounts for the lower bound on nominal interest rates, we analyze US post-crisis macroeconomic dynamics and provide reference parameter estimates. We find that despite the attention received in the literature, neither the inclusion of...
Persistent link: https://www.econbiz.de/10012406022
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Price rigidities and the granular origins of aggregate fluctuations
Pasten, Ernesto; Schoenle, Raphael; Weber, Michael - 2017 - This version: August 2017
We study the aggregate implications of sectoral shocks in a multi-sector New Keynesian model featuring sectoral heterogeneity in price stickiness, sector size, and input-output linkages. We calibrate a 341 sector version of the model to the United States. Both theoretically and empirically,...
Persistent link: https://www.econbiz.de/10011717236
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Price rigidities and the granular origins of aggregate fluctuations
Pasten, Ernesto; Schoenle, Raphael; Weber, Michael - 2017
We study the aggregate implications of sectoral shocks in a multi-sector New Keynesian model featuring sectoral heterogeneity in price stickiness, sector size, and input-output linkages. We calibrate a 341 sector version of the model to the United States. Both theoretically and empirically,...
Persistent link: https://www.econbiz.de/10011732756
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US business cycle dynamics at the zero lower bound
Böhl, Gregor; Strobel, Felix - 2020
Using a nonlinear Bayesian likelihood approach that fully accounts for the zero lower bound on nominal interest rates, the authors analyze US post-crisis business cycle dynamics and provide reference parameter estimates. They find that neither the inclusion of financial frictions nor that of...
Persistent link: https://www.econbiz.de/10012234437