While the asset price collapse of the late 80s in Japan might explain the disinflationary pressures that followed, it is hard to attribute the persistent deflation that the country has faced since the mid 90s to that initial shock. We argue that a failure to account for demographic trends when...

We develop a multisector model in which capital and labor are free to move across firms within each sector, but cannot move across sectors. To isolate the role of sectoral specificity, we compare our model with otherwise identical multisector economies with either economy-wide factor markets (as...

This paper augments a relatively standard dynamic general equilibrium model with financial frictions in order to quantify the macroeconomic effects of the credit deepening process observed in many Latin American (LA) countries in the last decade, most notably in Brazil. In the model, a stylized...

We combine questions from the Michigan Survey about the future path of prices, interest rates, and unemployment to investigate whether households are aware of the basic features of U.S. monetary policy. Our Öndings support the view that at least some groups of households form their expectations...

We quantify the informational content of statements issued by the interest-rate setting com-mittee of the Central Bank of Brazil (COPOM), building on the methodology developed by Luccaand Trebbi (2011). Using Google search queries, we measure the extent to which each COPOM statement is perceived...

Helping the public understand how monetary policy is conducted is an important goal for the Federal Reserve. One way to measure people’s understanding is through surveys that show household expectations for the economy. Responses from the Michigan survey show some groups of households appear...

We combine questions from the Michigan Survey about future inflation, unemployment, and interest rates to investigate whether households are aware of the basic features of U.S. monetary policy. Our findings provide evidence that some households form their expectations in a way that is consistent...

We study how real exchange rate dynamics are affected by monetary policy in dynamic, stochastic, general equilibrium, sticky-price models. Our analytical and quantitative results show that the source of interest rate persistence – policy inertia or persistent policy shocks – is key. When the...