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Monetary Policy and Stock Market Boom-Bust Cycles

Christiano, Lawrence J.; Ilut, Cosmin L.; Motto, Roberto; … - 2021

overoptimistic. We find that it is difficult to generate a boom-bust cycle (a period in which stock prices, consumption, investment … and employment all rise and then crash) in response to such a news shock, in a standard real business cycle model. However … a welfare-reducing boom-bust cycle in response to a news shock. We explore the possibility that integrating credit …

Persistent link: https://www.econbiz.de/10013316465

Business Cycle Dynamics Under Rational Inattention

Maćkowiak, Bartosz - 2011

We develop a dynamic stochastic general equilibrium model with rational inattention by households and firms. Consumption responds slowly to interest rate changes because households decide to pay little attention to the real interest rate. Prices respond quickly to some shocks and slowly to other...

Persistent link: https://www.econbiz.de/10013127486

Price Rigidities and the Granular Origins of Aggregate Fluctuations

Pasten, Ernesto - 2017

We study the aggregate implications of sectoral shocks in a multi-sector New Keynesian model featuring sectoral heterogeneity in price stickiness, sector size, and input-output linkages. We calibrate a 341 sector version of the model to the United States. Both theoretically and empirically,...

Persistent link: https://www.econbiz.de/10012945756

Animal Spirits, Fundamental Factors and Business Cycle Fluctuations

Dées, Stéphane - 2016

This paper explores empirically the role of noisy information in cyclical developments and aims at separating fluctuations that are due to genuine changes in fundamentals from those due to temporary animal spirits or expectational errors (noise shocks). Exploiting the fact that the...

Persistent link: https://www.econbiz.de/10012983085

Stock Price Cycles and Business Cycles

Adam, Klaus; Merkel, Sebastian - 2021

investment. The model thus features a 'financial accelerator', despite the absence of financial frictions. The financial …

Persistent link: https://www.econbiz.de/10013315341

The Effect of Bank Shocks on Firm-Level and Aggregate Investment

Amador, João - 2016

We show that credit supply shocks have a strong impact on firm-level as well as aggregate investment by applying the … are found to impair firm-level investment in all firms in our sample, but in particular for small firms and those with no … 20-40% of aggregate investment dynamics …

Persistent link: https://www.econbiz.de/10012988608

Monetary policy and stock market boom-bust cycles

Christiano, Lawrence; Ilut, Cosmin; Motto, Roberto; … - 2008

Persistent link: https://www.econbiz.de/10011605001

On the Sources of Business Cycles : Implications for DSGE Models

Andrle, Michal - 2017

What are the drivers of business cycle fluctuations? And how many are there? By documenting strong and predictable co-movement of real variables during the business cycle in a sample of advanced economies, we argue that most business cycle fluctuations are driven by one major factor. The...

Persistent link: https://www.econbiz.de/10012956242

Asset Pricing and the Propagation of Financial Shocks

Jaccard, Ivan - 2018

This study augments the neoclassical growth model with a mechanism that creates a novel transmission channel through which financial shocks propagate to the real economy. By affecting agents' ability to finance consumption expenditures, financial frictions create a demand for safe assets that...

Persistent link: https://www.econbiz.de/10012918412

Countercyclical Capital Regulation in a Small Open Economy DSGE Model

Lozej, Matija - 2018

We examine, conditional on structural shocks, the macroeconomic performance of different countercyclical capital buffer (CCyB) rules in small open economy estimated medium scale DSGE. We find that rules based on the credit gap create a trade-off between the stabilization of fluctuations...

Persistent link: https://www.econbiz.de/10012921203