Showing 1 - 10 of 25
While the degree of policy inertia in central banks' reaction functions is a central ingredient in theoretical and empirical monetary economics, the source of the observed policy inertia in the U.S. is controversial, with tests of competing hypotheses such as interest-smoothing and...
Persistent link: https://www.econbiz.de/10012461950
decreased during the 2000-2005 economic recovery. The decrease appears to be driven by falling volatility of transitory income …
Persistent link: https://www.econbiz.de/10012463569
With positive trend inflation, the Taylor principle is not enough to guarantee a determinate equilibrium. We provide new theoretical results on restoring determinacy in New Keynesian models with positive trend inflation and combine these with new empirical findings on the Federal Reserve's...
Persistent link: https://www.econbiz.de/10012464026
level of the fundamentals. Though volatility shocks could be important too, their propagating mechanism is still not well … can separate the level factors from the volatility factors and assess their relative importance without directly … estimating the volatility processes. This is made possible by exploiting features in the second order approximation of …
Persistent link: https://www.econbiz.de/10012455010
that, after monetary policy announcements, the conditional volatility rises more for firms with stickier prices than for …
Persistent link: https://www.econbiz.de/10012459801
Using a new survey, we show that the dispersion of marginal products across firms in the European Union is about twice as large as that in the United States. Reducing it to the US level would increase EU GDP by more than 30 percent. Alternatively, removing barriers between industries and...
Persistent link: https://www.econbiz.de/10012453270
The length of the recovery since the Great Recession and the low reported levels of the unemployment rate in the U.S. are increasingly generating concerns about inflationary pressures. We document that an expectations-augmented Phillips curve can account for inflation not just in the U.S. but...
Persistent link: https://www.econbiz.de/10012479467
We construct an endogenous growth model that includes a cultural variable along the dimension of individualism-collectivism. The model predicts that more individualism leads to more innovation because of the social rewards associated with innovation in an individualist culture. This cultural...
Persistent link: https://www.econbiz.de/10012462288
We construct a model of revolution and transition to democracy under individualistic and collectivist cultures. The main result is that, despite facing potentially larger collective action problems, countries with an individualistic culture are more likely to end up adopting democracy earlier...
Persistent link: https://www.econbiz.de/10012457549
Using responses obtained through the Nielsen Homescan panel survey, we explore the differences between managers' and non-managers' expectations and perceptions of inflation and unemployment. By and large, managers and non-managers exhibit similar average inflation and unemployment expectations...
Persistent link: https://www.econbiz.de/10013191080