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Monopolistic competition, increasing returns to scale, and the welfare costs of inflation

Wu, Yangru; Zhang, Junxi - In: Journal of monetary economics 46 (2000) 2, pp. 417-440

Persistent link: https://www.econbiz.de/10001506968

Increasing returns to scale and welfare : ranking the multiple deterministic equilibria

Bambi, Mauro; Saïdi, Aurélien - 2008

We consider a real business cycle model with a productive externality and an aggregate non- convex technology set µa la Benhabib and Farmer embodying capacity utilization, which exhibits indeterminacy of the steady state and multiplicity of deterministic equilibria under plausible values of the...

Persistent link: https://www.econbiz.de/10003762308

Understanding the Large Negative Impact of Oil Shocks

Wen, Yi - 2014

This paper offers a plausible explanation for the close link between oil prices and aggregate macroeconomic performance in the 1970s. Although this link has been well documented in the empirical literature, standard economic models are not able to replicate this link when actual oil prices are...

Persistent link: https://www.econbiz.de/10012709883

Welfare Gains of Inflation Reduction in a Micro-Founded Macroeconometric Model

Guerrón-Quintana, Pablo - 2008

This paper computes the welfare gains from inflation reduction in an estimated dynamic stochastic general equilibrium … welfare gains from a 10 percentage points drop in inflation. Under some circumstances, the transitional losses can erase most …

Persistent link: https://www.econbiz.de/10014049221

An Inquiry into the Existence and Uniqueness of Equilibrium with State-Dependent Pricing

John, A. Andrew - 2012

State-dependent pricing models are now an operational framework for quantitative business cycle analysis. The analysis in Ball and Romer (1991), however, suggests that such models may be rife with multiple equilibria: in their static model price adjustment is always characterized by...

Persistent link: https://www.econbiz.de/10013097073

Can a pure real business cycle model explain the real exchange rate : the case of Ukraine

Onishchenko, Kateryna - 2011

Real exchange rate (RER) is an important instrument for restoring sustainable economic growth in the small open economy with large export share. RER of Ukrainian currency can be explained within the real business cycle (RBC) framework without any forms of nominal rigidities. Fitting Ukrainian...

Persistent link: https://www.econbiz.de/10009229205

What Prevents a Real Business Cycle Model from Matching the U.S. Data? Decomposing the Labor Wedge

Plotnikov, Dmitry - 2017

I carry out a business cycle accounting exercise (Chari, Kehoe and McGrattan, 2007) on theU.S. data measured in wage units (Farmer (2010)) for the entire postwar period. In contrast toa conventional approach, this approach preserves common medium-term business cyclefluctuations in GDP, its...

Persistent link: https://www.econbiz.de/10012945679

Business cycles with cyclical returns to scale

Hyun, Jay; Kim, Ryan; Lee, Byoungchan - 2022

We study business cycles with cyclical returns to scale. Contrary to tightly parameterized production functions (Cobb-Douglas and Constant Elasticity of Substitution), we empirically identify strong input complementarity that leads to procyclical returns to scale. We therefore propose a flexible...

Persistent link: https://www.econbiz.de/10013260122

Price Setting and the Steady-State Effects of Inflation

Casares, Miguel - 2021

This paper examines how price setting plays a key role in explaining the steady-state effects of inflation in a … adjusted by the rate of inflation. We found that in an economy with less indexed prices the steady-state negative impact of … inflation on output is higher. In the extreme case without no price indexation at all (purely Calvo-type economy …

Persistent link: https://www.econbiz.de/10013320241

Drivers of post-pandemic price dynamics and labour market tightness in the euro area

Juvonen, Petteri; Nelimarkka, Jaakko; Obstbaum, Meri; … - 2025

We study recent inflation and labour market dynamics in the euro area within a general equilibrium framework. Rapid … inflation was mainly caused by demand and supply shocks, but labor market-specific shocks also contributed to the surge in … inflation. Our results underscore the significance of import price shocks in explaining the recent interactions between wages …

Persistent link: https://www.econbiz.de/10015410150