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Vetlov, Igor; Hlédik, Tibor; Jonsson, Magnus; Kucsera, … - Lietuvos Bankas - 2011

In view of the increasing use of Dynamic Stochastic General Equilibrium (DSGE) models in the macroeconomic projections and the policy process, this paper examines, both conceptually and empirically, alternative notions of potential output within DSGE models. Furthermore, it provides historical...

Persistent link: https://www.econbiz.de/10009402034

The Output Gap, the Labor Wedge, and the Dynamic Behavior of Hours

Sala, Luca; Söderström, Ulf; Trigari, Antonella - 2011

We use a standard quantitative business cycle model with nominal price and wage rigidities to estimate two measures of economic inefficiency in recent U.S. data: the output gap: the gap between the actual and efficient levels of output -- and the labor wedge -- the wedge between households'...

Persistent link: https://www.econbiz.de/10014188955

Switching-Track after the Great Recession

Vinci, Francesca; Licandro, Omar - 2021

We propose a theoretical framework to reconcile episodes of V-shaped and L-shaped recovery, encompassing the behaviour of the U.S. economy before and after the Great Recession. In a DSGE model with endogenous growth, negative demand shocks destroy productive capacity, moving GDP to a lower...

Persistent link: https://www.econbiz.de/10012599194

Monetary persistence and the labor market : a new perspective

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

In this paper we propose a novel way to model the labor market in the context of a New-Keynesian general equilibrium model, incorporating labor market frictions in the form of hiring and firing costs. We show that such a model is able to replicate many important stylized facts of the business...

Persistent link: https://www.econbiz.de/10003937114

Output Hysteresis and Optimal Monetary Policy

Garga, Vaishali - 2018

output, a phenomenon termed as "output hysteresis." In the model, incomplete stabilization of a temporary shortfall in demand … hysteresis is contingent on the monetary policy rule. When the nominal interest rate is constrained at the zero lower bound, a … central bank unable to commit to future policy actions suffers from "hysteresis bias": it does not offset past losses in …

Persistent link: https://www.econbiz.de/10012911738

Climate Hysteresis and Monetary Policy

Panton, Augustus - 2020

-emergence of the Blanchard-Summers' hysteresis debate and a new business cycle paradigm in which the short-term output effects of … hysteresis into the estimation of potential output and the output and unemployment gaps. The results suggest non …

Persistent link: https://www.econbiz.de/10012824904

Monetary Persistence and the Labor Market : A New Perspective

Lechthaler, Wolfgang; Merkl, Christian; Snower, Dennis J. - 2021

Persistent link: https://www.econbiz.de/10013316264

The Taylor principle and (in-)determinacy in a New Keynesian model with hiring frictions and skill loss

Rannenberg, Ansgar - 2010

We introduce skill decay during unemployment into Blanchard and Gali's (2008) New-Keynesian model with hiring frictions and real-wage rigidity. Plausible values of quarterly skill decay and real-wage rigidity turn the long-run marginal cost-unemployment relationship positive in a "European"...

Persistent link: https://www.econbiz.de/10011596398

Output hysteresis and optimal monetary policy

Garga, Vaishali; Singh, Sanjay R. - 2019

output, a phenomenon termed as output hysteresis. In the model, incomplete stabilization of a temporary shortfall in demand … bound (ZLB), optimal commitment policy sets interest rates to eliminate output hysteresis. A strict in ation targeting rule … sub-optimal and admits output hysteresis. A new policy rule that targets output hysteresis returns the output to the pre …

Persistent link: https://www.econbiz.de/10012101398

Demand Shocks, Hysteresis and Monetary Policy

Sim, Jae - 2022

This paper builds a micro-founded general equilibrium model of hysteresis in which changing composition of firms with … "creative destruction". Hysteresis fundamentally challenges existing consensus on stabilization policies: the complete …

Persistent link: https://www.econbiz.de/10014238148