Recently macroeconomists have intensified their efforts to develop models that are able to generate persistent reactions of real variables to monetary shocks in stochastic DGE models with nominal rigidities. This has proven to be quite difficult in models with price staggering only. Most papers...

This paper considers the implications of adding capital as a factor of production in a stochastic DGE model with sticky prices for the effects of money growth shocks. Particular attention is given to the role of money demand and to the form of the utility function. I consider cash-in-advance-...

This paper investigates how the identification assumptions of monetary policy shocks modify the inference in a standard DSGE model. Considering SVAR models in which either the interest rate is predetermined for money or these two monetary variables are simultaneously determined, two DSGE models...

A small macroeconomic model is constructed to study the transmission of the monetary policy conducted by the Deutsche Bundesbank (DBB) since the middle of the 1970s. For this purpose quarterly, seasonally unadjusted data for the period from 1975 to 1998 are used, that is, the period until the...

This paper derives approximate analytical solutions for various financial assets in the production economy with monetary shocks. Both technology and monetary shocks drive the dynamics of various financial assets. Special cases of permanent and transitory shocks are considered.The solutions based...

We examine the responses of prices and inflation to monetary shocks in an inventory-theoretic model of money demand. We show that the price level responds sluggishly to an exogenous increase in the money stock because the dynamics of households' money inventories leads to a partially offsetting...

Zimbabwe has recently experienced record hyperinflation of 80 billion percent a month. This paper uses new data from Zimbabwe to investigate money demand under hyperinflation using an ARDL estimation for the period 1980-2008. The results produce plausible convergence rates and long- run...

We analyze the short-run effects of money shocks on output in the contemporary world. As our benchmark case, we visit Bernanke (1983) for the Turkish economy over the monthly period 2002M1-2006M10. We show that money shocks affect output with a lag of one month. After that, we introduce our...

The objective of this paper is to validate the existence of an extensively documented secular upward trend in corporate cash holding. To do this, we use the new data for Poland and review original datasets from Bates et al. [2009] for the U.S. We find no trace of a trend for Poland and believe...

Several recent studies have expressed concern that the Haar prior typically imposed in estimating sign-identified VAR models may be unintentionally informative about the implied prior for the structural impulse responses. This question is indeed important, but we show that the tools that have...