Lumpy investment and the monetary transmission mechanism

The lumpy nature of plant-level investment is generally not taken into account in the context of New Keynesian monetary theory (see, e.g., Christiano et al., 2005; Woodford, 2005). Our main result shows that if this theory is augmented by a standard model of lumpy investment, monetary policy shocks lead to large but very short-lived impacts on output and inflation, in a way that goes against empirical evidence and the consensus view in the literature.

MoreLess

Year of publication:	2013
Authors:	Reiter, Michael ; Sveen, Tommy ; Weinke, Lutz
Published in:	Journal of Monetary Economics. - Elsevier, ISSN 0304-3932. - Vol. 60.2013, 7, p. 821-834
Publisher:	Elsevier
Subject:	Lumpy investment \| Sticky prices

More details

Type of publication:	Article
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010868954