This paper examines, through a modified aggregate demand curve, the reduction in equilibrium income caused by the presence of precautionary demand in the money demand function. Specifically, this paper rigorously analyses the transformation of the well-known fiscal and monetary policy...

We propose a new model in which relationship-specific e!ects or shocks are identified in a bipartite network under mild covariance restrictions, generalizing the influential Abowd et al. (1999) framework. For example, separate demand shocks are identified for each bank from which a firm borrows....

This study leverages high-frequency foot-traffic data from SafeGraph to estimate demand shocks in customer-facing establishments across New York City's retail, service, and health sectors. Recognizing that variations in foot traffic can arise from both unpredictable demand shocks and firm-driven...

There is limited theoretical understanding of cost pass-through in markets where prices are dispersed. This paper analyzes cost pass-through within a framework that encompasses many models in the price dispersion literature where consumers vary in the number of firms they consider. We...

This paper examines how shifts in investor demand influence firm financing and investment decisions. For identification, the paper exploits a large-scale MSCI methodo logical reform that mechanically redefined the stock weights in major international equity benchmark indexes, changing the...

Background: The rapid evolution of omnichannel retailing has reshaped retail supply chains (SCs) by coupling replenishment, fulfillment, and service decisions across multiple demand channels under inventory, lead-time, and capacity constraints. These interdependencies create coordination...

We propose a new model in which relationship-specific supply and demand shocks are non-parametrically identified in bipartite data under mild assumptions. For example, separate heterogeneous supply shocks are identified for each firm to which a bank lends. We show that a simple estimator is...

We investigate how firms adjust to demand shocks when wages and employment determination are regulated. Using firm-level data for the Italian metal engineering industry from 2009 to 2021, we estimate the elasticity of the wage bill to changes in firm's real sales. We disentangle the effect on...

Questions about market power have become salient in macroeconomics. We consider the role of institutional structures in addressing these within a dynamic general equilibrium framework. Standard models account for monopoly profits as a lump-sum transfer to the representative agent. We label this...

There is limited theoretical understanding of cost pass-through within markets where prices are dispersed. Under a general demand function, we analyse the effects of cost changes in a seminal model of price dispersion, where some consumers are captive to particular sellers while others are not...

Keynes's Principle of Effective Demand is widely recognized not only as a major theoretical innovation but also as one of the core concepts uniting various post-Keynesian strands. However, Keynes's own treatment of the Principle of Effective Demand - known as the Z/D model and identified by...

What is the effect of immigration on native labor-market outcomes? An extensive literature identifies the differential impact of immigration on natives employed in jobs that are more exposed to immigrant labor (supply exposure). But immigrants consume in addition to producing output. Despite...

We analyze the impact of demand and supply shocks on income inequality and price heterogeneity using data from Korea. We identify structural demand and supply shocks using long-run restrictions and estimate the effects of these shocks on the income distribution and income-specific CPIs using a...

The literature on the empirical linkages between economic growth (or other measures of macroeconomic performance) and the functional distribution of income is copious on the short run. The sustained and simultaneous decline in average rates of real GDP growth and the labor share of income in the...

This study applies the Quadratic Almost Ideal Demand System (QUAIDS) to the Asian Development Bank's Multi-Region Input-Output (MRIO) dataset to estimate global demand and supply elasticities across intermediate vs. final, and domestic vs. foreign sectors. Using pooled data from 2021-2023,...

This paper sheds new light on an overlooked channel of monetary transmission: the relationship between central bank interest rate policy and the economy’s trade position. It examines the impact of monetary policy on import dynamics through its effect on domestic demand composition. In 2023,...

Building on evidence of a stronger multiplier effect of social benefits during Brazil's 2015-2016 crisis, and the relative stability of consigned credit to retirees compared to active workers, we propose a demand-driven theoretical model to formalize the observed higher transfer multiplier in...

This paper examines how firms' innovation activity responds to product- and destination-specific export demand shocks in their export markets. I draw on unique administrative data for Finnish manufacturing firms from 1999 onwards, matched with national customs records, patent data, and...

Large swings in the expenditure shares of goods and services at the start of the pandemic have contributed to the inflation surge, posing new challenges for monetary policy. Using a multi-sector model featuring upward labor adjustment frictions, we analyze the transmission of monetary policy...

The principle of effective demand, and the claim of its validity for a monetary production economy in the short and in the long run, is the core of heterodox macroeconomics, as currently found in all the different strands of post-Keynesian economics (Fundamentalists, Kaleckians, Sraffians,...

This paper first presents a dynamic model that features both real and monetary aspects of international trade and is capable of dealing with both full employment and secular unemployment. The model is then utilized to examine the effect of a tariff on the terms of trade, the trade pattern, real...

Mainstream Macroeconomics has withdrawn completely from its remote origins in Keynes and Kalecki, replacing the principle of effective demand (P.E.D.) with supply economics, investment with savings, and dynamics with equilibrium as a norm This article discusses, in the event of Kalecki’s...