Fazzari, Steven M.; Ferri, Piero; Greenberg, Edward - In: Journal of Economic Dynamics and Control 34 (2010) 10, pp. 2010-2022
We study monetary policy in a reduced-form dynamic model with bounded rationality and an empirically motivated investment function. Investment has important dynamic effects in our model. In particular, the cost of capital effect on investment is more important for monetary transmission than the...