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Monetary policy and asset price overshooting: a rationale for the Wall/Main Street disconnect

Caballero, Ricardo J.; Simsek, Alp - 2022

We analyze optimal monetary policy and its implications for asset prices, when aggregate demand has inertia and responds to asset prices with a lag. If there is a negative output gap, the central bank optimally overshoots aggregate asset prices (asset prices are initially pushed above their...

Persistent link: https://www.econbiz.de/10013093040

Towards technology-news-driven business cycles

Di Casola, Paola; Sichlimiris, Spyridon - 2018

We identify an inflationary technology news shock as the leading source of business cycle variations for the postwar U ….S. economy. This shock acts like a demand shock: it induces strong positive comovement in real quantities - GDP, consumption … technological innovations reduce inflation. The technology news shock became the predominant source of the business cycle from the …

Persistent link: https://www.econbiz.de/10011930326

A note on temporary supply shocks with aggregate demand inertia

Caballero, Ricardo J.; Simsek, Alp - 2022

We study optimal monetary policy during temporary supply contractions when aggregate demand has inertia and expansionary policy is constrained. In this environment, it is optimal to run the economy hot until supply recovers. Positive output gaps in the low-supply phase lessen the negative output...

Persistent link: https://www.econbiz.de/10012886884

Fiscal Policy and Macroeconomic Imbalances

Baldacci, Emanuele; Gupta, Sanjeev; Mulas-Granados, Carlos - Banca d'Italia - 2014

The volume collects the essays presented at the 15th Workshop on Public Finance organised by Banca d'Italia in Perugia from 4 to 6 April 2013. The workshop focused on the link between fiscal policy and macroeconomic imbalances and comprised four sessions. The first session concentrated on the...

Persistent link: https://www.econbiz.de/10011277938

Demand and supply shock symmetry across Polish voievodships

Gajewski, Paweł - 2018

Persistent link: https://www.econbiz.de/10012174113

Exploring correlations between aggregate demand and supply shocks in India

Goyal, Ashima; Ray, Sritama - 2022

Persistent link: https://www.econbiz.de/10013339303

Good news about news shocks

Langer, Viktoria C. E. - 2015 - Version: June 2015

Extending and modifying the canonical New Keynesian (NK) model, this study provides a novel approach to examine the impact of anticipated shocks called "news shocks" on business cycles. The analysis shows that news shocks are less stressful for an economy than commonly assumed. The main results...

Persistent link: https://www.econbiz.de/10011373568

Endogenous Growth, Monetary Shocks and Nominal Rigidities

Annicchiarico, Barbara; Pelloni, Alessandra; Rossi, Lorenza - 2010

We introduce endogenous growth in an otherwise standard NK model with staggered prices and wages. Some results follow: (i) monetary volatility negatively affects long-run growth; (ii) the relation between nominal volatility and growth depends on the persistence of the nominal shocks and on the...

Persistent link: https://www.econbiz.de/10010343890

The propagation of tariff shocks via production networks

Antonova, Anastasiia; Huxel, Luis; Matvieiev, Mykhailo; … - 2025

Imports feature at all stages of production as well as in final consumption, and this is key to how tariff shocks play out. If imposed on imports in upstream sectors, import tariffs lower domestic output in downstream sectors; if imposed downstream, they raise upstream production. The aggregate...

Persistent link: https://www.econbiz.de/10015407816

Risk-taking, capital allocation and optimal monetary policy

David, Joel M.; Zeke, David - 2021

total factor productivity (TFP) is endogenous and depends on the resource allocation. The model uncovers a novel tradeoff …

Persistent link: https://www.econbiz.de/10012415672