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Capital-Labor Substitution, Equilibrium Indeterminacy, and the Cyclical Behavior of Labor Income
Guo, Jang-Ting; Lansing, Kevin J. - Department of Economics, University of California-Riverside - 2008
This paper examines the quantitative relationship between the elasticity of capital-labor substitution and the conditions needed for equilibrium indeterminacy (and belief-driven áuctuations) in a one-sector growth model. Our analysis employs a ínormalizedîversion of the CES production...
Persistent link: https://www.econbiz.de/10005006784
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MODELLING ECONOMIC FLUCTUATIONS IN SUBSAHARAN AFRICA:A VECTOR AUTOREGRESSIVE APPROACH
NWAOBI, DR. GODWIN CHUKWUDUM - EconWPA - 2004
A controversial result of some current research on the real business cycles is the claim that a common stochastic trend(the cumulative effect of permanent shocks to productivity)underlies the bulk of economic fluctuations. If confirmed, this will imply that many other forces have been relatively...
Persistent link: https://www.econbiz.de/10005412719
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EMU and the adjustment to asymmetric shocks: the case of Italy
Amisano, Gianni; Giammarioli, Nicola; Stracca, Livio - 2009
In this paper we address the question on whether EMU has amplified or dampened intra euro area divergencies, by looking at a time-varying VAR model of Italy’s relative performance compared with the rest of the euro area, spanning from 1976 to 2009. Our main result is that EMU does not appear...
Persistent link: https://www.econbiz.de/10011605174
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Robustness and Real Consequences of Nominal Wage Rigidity
Fehr, Ernst; Goette, Lorenz - 2021
Recent studies found evidence for nominal wage rigidity during periods of relatively high nominal GDP growth. It has been argued, however, that in an environment with low nominal GDP growth, when nominal wage cuts become customary, workers' opposition to nominal cuts would erode and, hence,...
Persistent link: https://www.econbiz.de/10013321298
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The Lead of Output Over Inflation in Sticky Price Models
Kiley, Michael T. - 2002
the consistency of these correlations with three models of price adjustment: the partial adjustment model, a staggered … the partial adjustment model requires the highest ratio. These results reveal that the recent burst of researchers using … the partial adjustment model will find a larger role for supply shocks than alternative models of price rigidity …
Persistent link: https://www.econbiz.de/10014105840
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Small price changes, sales volume, and menu cost
Sayag, Doron; Snir, Avichai; Levy, Daniel C. - 2024 - Revised: February 29, 2024
Persistent link: https://www.econbiz.de/10014501031
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Deflation and Relative Prices: Evidence from Japan and Hong Kong
Gerlach, Stefan; Kugler, Peter - 2011
We test the menu cost model of Ball and Mankiw (1994, 1995) on data from the inflation and deflation periods in Japan and Hong Kong. We calculate the moments of the distribution of price changes using a random split procedure to overcome the bias noted by Cecchetti and Bryan (1999). The key...
Persistent link: https://www.econbiz.de/10010305944
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Inflation dynamics and regime shifts
Lendvai, Julia - 2006
This paper extends the New Keynesian model to allow for stochastic shifts in the monetary policy regime. Agents cannot observe the regime and use a Bayesian learning rule to make optimal inferences. Price setting is adapted to this environment: lagged expectations about monetary policy influence...
Persistent link: https://www.econbiz.de/10011604730
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Customer Markets, Non-Separable Utility and the Real Effects of Monetary Policy Shocks
Hristov, Nikolay - 2010
As is well known, one of the major shortcomings of the New Keynesian model (NKM) with Calvo-type price setting is the lack of a microeconomic foundation of its most important building block - price stickiness. In this paper I investigate the ability of a monetary Customer Markets model to...
Persistent link: https://www.econbiz.de/10010270130
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Firms' Heterogeneity, Endogenous Entry, and Exit Decisions
Totzek, Alexander - 2010
As GDP is highly correlated with both entering and exiting firms, we develop a totally microfounded DSGE model with endogenous firms entry as well as exit decisions. We show that the simplifying assumption of a constant firms' death rate made by the recent literature on DSGE modelling can lead...
Persistent link: https://www.econbiz.de/10010270281