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The uncertainty of U.S. core inflation, measured by the stochastic volatility of forecast errors, has soared to a level … increase after a positive shock to core inflation uncertainty in a vector autoregression. Endogenous changes in household … inflation expectations help to understand the transmission mechanism through which an inflation uncertainty shock generates …
Persistent link: https://www.econbiz.de/10014436184
During the Great Moderation, macroeconomic volatility declined while firm markups increased. We document a causal relationship between volatility and markups due to tacit collusion. We exploit the legalisation of interstate banking as an exogenous decrease in volatility. Using an instrumental...
Persistent link: https://www.econbiz.de/10014254341
coordinated wage bargaining systems have a dampening impact on inflation volatility. …
Persistent link: https://www.econbiz.de/10011605051
form of sticky prices improves the model's performance at explaining inflation but worsens it for output. The most dramatic …
Persistent link: https://www.econbiz.de/10014141011
shocks driving the economy and the systematic response of monetary policy to inflation: More flexible prices amplify the … effect of demand shocks on output if interest rates do not respond strongly to inflation, while higher flexibility amplifies … the effect of supply shocks on output if interest rates are very responsive to inflation. Next, we estimate a medium …
Persistent link: https://www.econbiz.de/10013111575
shocks driving the economy and the systematic response of monetary policy to inflation: More flexible prices amplify the … the effect of supply shocks on output if interest rates are very responsive to inflation. Next, we estimate a medium …
Persistent link: https://www.econbiz.de/10009521652
In this paper, we study a new channel to explain firms' price setting behavior. We propose that uncertainty about factor prices has a positive effect on markups. We show theoretically that firms with higher shares of inputs with volatile prices set higher markups. We use the Bartik shift-share...
Persistent link: https://www.econbiz.de/10012695355
We estimate real consumption's growth rate and volatility in light of three new facts documenting geographic differences in consumption: (1) consumers in separate markets buy different products, (2) a product's market share varies geographically conditional on relative price, and (3) product...
Persistent link: https://www.econbiz.de/10012932589
We propose a multicountry quantile factor augmeneted vector autoregression (QFAVAR) to model heterogeneities both across countries and across characteristics of the distributions of macroeconomic time series. The presence of quantile factors allows for summarizing these two heterogeneities in a...
Persistent link: https://www.econbiz.de/10014314068
both unemployment and inflation rates in the long term, while other factors showed a negative correlation. …
Persistent link: https://www.econbiz.de/10014636061