Technology Shocks and Monetary Policy PDF Download

Author: Jordi Galí
Publisher:
ISBN:
Category : Business cycles
Languages : en
Pages : 50

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Author: Jordi Galí
Publisher:
ISBN:
Category :
Languages : en
Pages :

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Author: Mr.Pau Rabanal
Publisher: International Monetary Fund
ISBN: 1451875657
Category : Business & Economics
Languages : en
Pages : 68

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Our answer: Not so well. We reached that conclusion after reviewing recent research on the role of technology as a source of economic fluctuations. The bulk of the evidence suggests a limited role for aggregate technology shocks, pointing instead to demand factors as the main force behind the strong positive comovement between output and labor input measures.

Author: Sanvi Avouyi-Dovi
Publisher:
ISBN:
Category : Monetary policy
Languages : en
Pages : 55

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Author: Sanvi Avouyi-Dovi
Publisher:
ISBN:
Category :
Languages : en
Pages : 36

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Author: Takuji Kawamoto
Publisher:
ISBN:
Category : Business cycles
Languages : en
Pages : 64

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In this paper, we develop a quantitative, general-equilibrium business cycle model with imperfect common knowledge regarding technology shocks. We first show that the model has the ability to explain the short-run contractionary effects of technology improvements that are found by recent empirical studies such as Ga̕l (1999) and Basu, Fernald, and Kimball (2002). In particular, the model predicts that a positive technology shock leads to a persistent decline in employment and a delayed, sluggish fall in inflation. Then we examine the role of monetary policy in stabilizing macroeconomic fluctuations originating from technology shocks. We show that monetary policy tends to fall short of accommodation of technology improvements when the central bank has only imperfect information on the state of the technology.

Author: John B. Taylor
Publisher: North Holland
ISBN:
Category : Business & Economics
Languages : en
Pages : 596

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This text aims to provide a survey of the state of knowledge in the broad area that includes the theories and facts of economic growth and economic fluctuations, as well as the consequences of monetary and fiscal policies for general economic conditions.

Author: Peter Nathan Ireland
Publisher:
ISBN:
Category : Keynesian economics
Languages : en
Pages : 29

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In the New Keynesian model, preference, cost-push, and monetary shocks all compete with the real business cycle model's technology shock in driving aggregate fluctuations. A version of this model, estimated via maximum likelihood, points to these other shocks as being more important for explaining the behavior of output, inflation, and interest rates in the postwar United States data. These results weaken the links between the current generation of New Keynesian models and the real business cycle models from which they were originally derived. They also suggest that Federal Reserve officials have often faced difficult trade-offs in conducting monetary policy.

Author: Qazi Haque
Publisher: GRIN Verlag
ISBN: 3656909806
Category : Business & Economics
Languages : en
Pages : 86

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Bachelor Thesis from the year 2013 in the subject Economics - Finance, grade: First Class Honours, The University of Adelaide, language: English, abstract: The purpose of this study is to illustrate how the basic Real Business Cycle (RBC) model can be modified to incorporate money in an attempt to construct monetary business cycle models of the U.S. economy. This is done for one case where money enters the model as direct lump-sum transfers to households and for the other case where money injections enter the economy through the financial system. Interestingly, the two channels generate very different responses to a money growth shock. In the first case, a positive money growth shock increases nominal interest rates and depresses economic activity, which is called the anticipated inflation effect. However, the popular consensus among economists is that nominal interest rates fall after a positive monetary shock. This motivates the construction of our second model where it is conjectured that the banking sector plays an important role in the monetary transmission mechanism and money is injected into the model through financial intermediaries. It is observed in this model that a positive monetary shock reduces interest rates and stimulates economic activity, which is called the liquidity effect. Furthermore, the statistics generated by the models show that monetary shocks have no effect on real variables when money enters as direct lump-sum transfers to households. On the contrary, such shocks have significant real impact when money enters through the financial system. Taken together, this implies that how money enters into the model significantly matters for the impact of monetary shocks and such shocks entering through financial intermediaries may be important in determining the cyclical fluctuations of the U.S. economy.

Author: Neville Francis
Publisher:
ISBN:
Category : Monetary policy
Languages : en
Pages : 22

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