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Confronting the representative consumer with household-size heterogeneity

Koulovatianos, Christos; Schröder, Carsten; Schmidt, Ulrich - 2010

Much analysis in macroeconomics empirically addresses economy-wide incentives behind consumer/investment choices by using insights from the way a single representative household would behave. Heterogeneity at the micro level can jeopardize attempts to back up the representative consumer...

Persistent link: https://www.econbiz.de/10010278011

Monetary persistence and the labor market: A new perspective

Lechthaler, Wolfgang; Merkl, Christian; Snower, Dennis J. - 2010

sluggish. Job creation and job destruction are negatively correlated. And the volatility of unemployment is much larger than in …

Persistent link: https://www.econbiz.de/10010278017

Monetary persistence and the labor market: a new perspective

Lechthaler, Wolfgang; Merkl, Christian; Snower, Dennis J. - 2008

It is common knowledge that the standard New Keynesian model is not able to generate a persistent response in output to temporary monetary shocks. We show that this shortcoming can be remedied in a simple and intuitively appealing way through the introduction of labor turnover costs (such as...

Persistent link: https://www.econbiz.de/10010278018

Hyperbolic discounting and the Phillips curve

Graham, Liam; Snower, Dennis J. - 2008

Using a standard dynamic general equilibrium model, we show that the interaction of staggered nominal contracts with hyperbolic discounting leads to inflation having significant long-run effects on real variables.

Persistent link: https://www.econbiz.de/10010278020

Hyperbolic discounting and positive optimal inflation

Graham, Liam; Snower, Dennis J. - 2011

The Friedman rule states that steady-state welfare is maximized when there is deflation at the real rate of interest. Recent work by Khan et al (2003) uses a richer model but still finds deflation optimal. In an otherwise standard new Keynesian model we show that, if households have hyperbolic...

Persistent link: https://www.econbiz.de/10010278022

Trend growth and the dynamic effects of government spending

Tesfaselassie, Mewael F. - 2011

The paper studies the macroeconomic effects of government spending shocks in an economy characterized by positive trend growth. It shows that the lower is the trend growth rate the less inflationary are government spending shocks and vice versa. Moreover, on impact output is higher but exhibits...

Persistent link: https://www.econbiz.de/10010278023

Barriers to exit

Chong, Alberto; León, Gianmarco - 2006

Unlike previous empirical studies that focus on barriers to entry in international trade, we focus on barriers to exit as measured by passport costs for a crosssection of countries. We test four common theories on the determinants of such exit barriers and find that macroeconomic and brain-drain...

Persistent link: https://www.econbiz.de/10010278222

Output volatility and openness to trade: A reassessment

Cavallo, Eduardo A. - 2007

volatility by exposing countries to terms-oftrade shocks. This view does not take into account that, as suggested by a recent … strand of the financial fragility literature, commercial trade might also reduce financially related volatility. Once this is … taken into account, the relationship between exposure to trade and output volatility is still an open question. Trade …

Persistent link: https://www.econbiz.de/10010278237

Trade, gravity and sudden stops: On how commercial trade can increase the stability of capital flows

Cavallo, Eduardo A. - 2006

Financial stability is an important policy objective, since crises are associated with large economic, social and political costs. Promoting stability requires preventing 'sudden stops' in capital flows, which are events in which foreign financing abruptly disappears. This paper contributes to...

Persistent link: https://www.econbiz.de/10010278261

Determinacy and learnability of monetary policy rules in small open economies

Llosa, Gonzalo; Tuesta, Vicente - 2006

rules might not be desirable since they promote greater volatility in the economy. …

Persistent link: https://www.econbiz.de/10010278266