Last edited by Gomuro
Sunday, May 3, 2020 | History

4 edition of Sticky prices and monetary policy found in the catalog.

Sticky prices and monetary policy

Boivin, Jean

Sticky prices and monetary policy

evidence from disaggregated U.S. data

by Boivin, Jean

  • 20 Want to read
  • 6 Currently reading

Published by National Bureau of Economic Research in Cambridge, Mass .
Written in English

    Subjects:
  • Monetary policy -- United States,
  • Prices -- United States -- Econometric models

  • Edition Notes

    StatementJean Boivin, Marc Giannoni, Ilian Mihov.
    SeriesNBER working paper series -- no. 12824., Working paper series (National Bureau of Economic Research) -- working paper no. 12824.
    ContributionsGiannoni, Marc Paolo, 1969-, Mihov, Ilian., National Bureau of Economic Research.
    The Physical Object
    Pagination32, [24] p. :
    Number of Pages32
    ID Numbers
    Open LibraryOL17632231M
    OCLC/WorldCa78923444

    In macroeconomics, nominal rigidity is necessary to explain how money (and hence monetary policy and inflation) can affect the real economy and why the classical dichotomy breaks down. If nominal wages and prices were not sticky, or perfectly flexible, they would always adjust such that there would be equilibrium in the economy. Sticky Prices and Monetary Policy: Evidence from Disaggregated U.S. Data Article (PDF Available) in American Economic Review 99(1) February with 78 Reads How we measure 'reads'. Get this from a library! Sticky prices and monetary policy: evidence from disaggregated U.S. data. [Jean Boivin; Marc Paolo Giannoni; Ilian Mihov; National Bureau of Economic Research.] -- "This paper disentangles fluctuations in disaggregated prices due to macroeconomic and sectoral conditions using a factor-augmented vector autoregression estimated on a large data set. Our main finding is that disaggregated prices appear sticky in response to macroeconomic fluctuations, and in particular to monetary policy, but flexible in response to sector-specific shocks. The observed flexibility of disaggregated prices is explained by the fact that sector-specific shocks account on average 85 % of their monthly fluctuations.

    This research was supported by the U.S. Department of Labor (ASPER). I am grateful for helpful comments from Costas Azariadis, JoAnna Gray, Herschel Grossman and Zvi by:


Share this book
You might also like
cojin

cojin

Civil service systems

Civil service systems

first year of French for young beginners

first year of French for young beginners

methodology for testing spreadsheet grids

methodology for testing spreadsheet grids

Proceedings of the Conference Algebra and Logic, Sarajevo 1987

Proceedings of the Conference Algebra and Logic, Sarajevo 1987

Pakistan

Pakistan

new medical dictionary

new medical dictionary

Report on the 1979 Near Eastern expedition

Report on the 1979 Near Eastern expedition

Strengthening the circle

Strengthening the circle

System in the composing room.

System in the composing room.

genealogie of Protestants, 1621

genealogie of Protestants, 1621

Day hiking

Day hiking

Trueblood professors seminar

Trueblood professors seminar

Personal Touch

Personal Touch

Sticky prices and monetary policy by Boivin, Jean Download PDF EPUB FB2

Optimal fiscal and monetary policy with sticky wages and sticky prices [An article from: Review of Economic Dynamics] [S.K. Chugh] on *FREE* shipping on qualifying offers. This digital document is a journal article from Review of Economic Dynamics, published by Elsevier in The article is delivered in HTML format and is available in your Media Library immediately Author: S.K.

Chugh. "Jordi Galí provides an authoritative overview of the research that revolutionized monetary economics during the past decade, by embedding sticky prices in a coherent dynamic general equilibrium framework--thus providing a novel and much clearer positive and normative analysis of monetary by:   Our main finding is that disaggregated prices appear sticky in response to macroeconomic and monetary disturbances, but flexible in response to sectorspecific shocks.

The observed flexibility of disaggregated prices reflects the fact that sector-specific shocks account on average for 85 percent of their monthly fluctuations.

aggregate series mistakenly assume that prices are sticky in the face of macroeconomic fluctuations, wheninfactprices adjustmorefrequentlytochangesineconomicconditions. Insuch acase, sectoral prices would be expected to respond on average rapidly to macroeconomic disturbances such as monetary policy shocks.

That is, consumer price stability characterizes optimal monetary policy if wages are sticky even if product prices are fully flexible. Inflation volatility is high in the baseline model of Chari, Christiano, and Kehoe () because surprise movements in the price level allow the government to synthesize real state-contingent debt.

Optimal Fiscal and Monetary Policy with Sticky Prices ∗ Henry E. Siu ƒ Þrst version: Janu ; Sticky prices and monetary policy book version: Ap Abstract In this paper, I study the properties of the Ramsey equilibrium in a model with dis-tortionary taxation, nominal non-state-contingent debt, and costs of surprise in ßation.

"The ideas contained in Michael Woodford's book Interest and Prices have influenced the way central bank economists-to say nothing of academic economists-in every corner of the world think about the conduct of monetary policy. These ideas form the most significant original book-length contribution to monetary economics since Don Patinkin's Money, Interest, and by: higher prices.

In contrast, in the sticky-price sector the price gradually rises for 15 months following the shock. Chart 2 shows that the boost to the quantity consumed is likewise longer-lasting for the sticky-price sector.

Chart 3 drives home the implications for the relative prices and quantities of flexible-price versus sticky-price goods. Sticky Prices and Monetary Policy: Evidence from Disaggregated US Data This paper shows Sticky prices and monetary policy book the recent evidence that disaggregated prices are volatile does not necessarily challenge the hypothesis of price rigidity used in a Sticky prices and monetary policy book class of macroeconomic models.

69 Interest Rate Rules in an Estimated Sticky Price Model tion does guarantee is that the empirical impulse response functions of infla- tion, output, and interest rates to the two VAR disturbances orthogonal to the monetary policy shock are identical to the impulse responses predicted by our theoretical model.

1 Introduction. Two distinct branches of the existing literature on optimal monetary policy deliver diametrically opposed policy recommendations concerning the long-run and cyclical behavior of prices and in- Sticky prices and monetary policy book rates. One branch follows the theoretical framework laid out in Lucas and Stokey ().

VOL. 99 NO. 1 BOiViN ET AL.: STicky PRicES ANd MONETARy POLicy prices suggests that prices are much more volatile than conventionally assumed Sticky prices and monetary policy book studies based Sticky prices and monetary policy book aggregate data.

For instance, Mark Bils and Peter J. Klenow (), looking at categories of consumer goods and services that cover about 70 percent of US consumer expenditures. Monetary policy with sticky prices and segmented markets assume that a fraction v t of the current income can be used to purchase consump- tion goods in the current : Tomoyuki Nakajima.

Optimal fiscal and monetary policy with sticky prices⁄ Henry E. Siu⁄⁄ Department of Economics, University of British Columbia, - East Mall, Vancouver, BC, Canada V6T 1Z1 Abstract This paper considers the role of state-contingent inflation as. By Robert Barro; Long-term contracting, sticky prices, and monetary policyCited by: Abstract Models with sticky prices predict that monetary policy changes will affect relative prices and relative quantities in the short run because some prices are more flexible than others.

In U.S. micro data, the degree of price stickiness differs dramatically across consumption categories. Sticky Prices and Monetary Policy: Evidence from Disaggregated U.S. Data Article (PDF Available) March with Reads How we measure 'reads'. The Liquidity Trap and Sticky Prices • The zero lower bound on the nominal interest rate creates a problem for the use of monetary policy as a stabilization tool.

• Monetary policy cannot close the output gap at the zero lower Size: KB. Price stickiness (or sticky prices) is the resistance of market price(s) to change quickly despite changes in the broad economy that suggest a different price is optimal.

"Sticky" is a general economics term that can apply to any financial variable that is resistant to change. This Paper studies optimal fiscal and monetary policy under sticky product prices.

The theoretical framework is a stochastic production economy without capital. The government finances an exogeneous stream of purchases by levying distortionary income taxes, printing money, and issuing one-period nominally risk-free bonds.

1) A price may be sticky because A) of monetary policy. B) of menu costs. C) of total factor productivity shocks. D) of the monetary illusion. Sticky Prices and Monetary Policy: Evidence from Disaggregated U.S.

Data Jean Boivin, Marc Giannoni, Ilian Mihov. NBER Working Paper No. Issued in January NBER Program(s):Economic Fluctuations and Growth, Monetary Economics This paper disentangles fluctuations in disaggregated prices due to macroeconomic and sectoral conditions using a factor Cited by:   The implications have subtle significance for monetary policy because so-called “sticky prices” — the notion that sellers aren’t able to change prices right away in response to changes in supply and demand — is precisely what gives interest rates power in mainstream models to have any effect on the economy at all.

Sticky Prices and Monetary Policy: Evidence from Disaggregated U.S. Data By Jean Boivin, Marc P. Giannoni, and Ilian Mihov Septem Abstract This paper shows that the recent evidence that disaggregated prices are volatile does not necessarily challenge the hypothesis of price rigidity used in a large class of macroeconomic models.

This paper studies and monetary policy under sticky product prices. The theoretical framework is a stochastic production economy without capital.

The government finances an exogenous stream of purchases by levying distortionary income taxes, printing money, and issuing one-period nominally risk-free bonds. International Finance Discussion Papers: Optimal Fiscal and Monetary Policy with Sticky Wages and Sticky Prices [Sanjay K.

Chugh, United States Federal Reserve Board] on *FREE* shipping on qualifying offers. We determine the optimal degree of price inflation volatility when nominal wages are sticky and the government uses state-contingent inflation to finance government : Sanjay K. Chugh. Executive Summary.

Many economists believe that prices are “sticky”—they adjust slowly. This stickiness, they suggest, means that changes in the money supply have an impact on the real economy, inducing changes in investment, employment, output and.

6 A Model with Sticky Wages and Prices 7 Monetary Policy and the Open Economy 8 Main Lessons and Some Extensions Index This page intentionally left blank.

Preface This book brings together some of the lecture notes that I have developed over the past few years, and which have been the basis for graduate courses on monetary. 6 Optimal Fiscal and Monetary Policy TheSecond-bestAllocation 8 Sticky Prices in a Demand-satisfying Model 9 Sticky Prices with Optimal Quantity Choices I wrote this book while teaching monetary economics during the period – atFile Size: 1MB.

Barro, Robert J., "Long-term contracting, sticky prices, and monetary policy," Journal of Monetary Economics, Elsevier, vol. 3(3), pages Best Sellers in Money & Monetary Policy #1. Life After Google: The Fall of Big Data and the Rise of the Blockchain Economy George Gilder.

out of 5 stars Hardcover. Money Mischief: Episodes in Monetary History (Harvest Book) Milton Friedman. out of 5 stars Kindle Edition. Downloadable. This paper studies optimal fiscal and monetary policy under sticky product prices. The theoretical framework is a stochastic production economy without capital.

The government finances an exogenous stream of purchases by levying distortionary income taxes, printing money, and issuing one-period nominally risk free bonds. The main findings of the paper are: First, for a miniscule.

“Optimal Fiscal and Monetary Policy: Equivalence Results.” Mankiw, N. G., and R. Reis. “Sticky Information Versus Sticky Prices: A Proposal to Replace the New Keynesian Phillips Curve.” McGrattan, E. “Predicting the Effects of Federal Reserve Policy in a Sticky Price Model: An Analytical Approach.”.

Monetary Policy for an Open Economy: An Alternative Framework with Optimizing Agents and Sticky Prices Bennett T. McCallum, Edward Nelson. NBER Working Paper No.

Issued in March NBER Program(s):Economic Fluctuations and Growth, Monetary Economics. This paper studies optimal fiscal and monetary policy under sticky product prices. The theoretical framework is a stochastic production economy. The government finances an exogenous stream of purchases by levying distortionary income taxes, printing money, and issuing nominal non-state-contingent by: This paper characterizes optimal fiscal and monetary policy with sticky price setting in intermediate goods markets.

With sticky prices, a benevolent government must balance the shock absorbing benefits of state-contingent inflation against its resource misallocation by: Prices need to be rigid for non-neutrality of shifts in demand. Are prices Sticky of ⁄exible.

Look at the evidence on price rigidities gathered in Klenow and Malin (Monetary Economics Handbook survey, on my webpage): Most prices in the economy are sticky. Modeling price. Optimal Fiscal and Monetary Policy with Sticky Prices Article in Journal of Monetary Economics 51(3) April with 11 Reads How we measure 'reads'.

Figure 5A and B displays the corresponding impulse response functions. First, and not surprisingly, we see that the introduction of price stickiness has a significant impact on the economy's response to a monetary policy shock (Figure 5A).Thus, under flexible prices no real variable is affected by the shock, and only inflation declines in response to the tightening of policy.

Learn about how bond yields are affected by monetary policy. Find out how this determines the risk-free rate of return and its large role in bond pricing. The Federal Reserve Bank of New York pdf to promote sound and well-functioning financial systems and markets through its provision of industry and payment services, advancement of infrastructure reform in key markets and training and educational support to international institutions.Monetary Policy and Real Exchange Rate Dynamics in Sticky-Price Models∗ Carlos Carvalho Central Bank of Brazil Download pdf Fernanda Nechio FRB San Francisco Fang Yao RB New Zealand April 7, Abstract We study how real exchange rate dynamics are a ected by monetary policy in dynamic, stochastic, general equilibrium, sticky-price models.Monetary policy has several important aims including eliminating unemployment, stabilizing prices, economic growth and equilibrium in ebook balance of payments.

Monetary policy is planned to fulfill all these goals at once. Everyone agrees with these ambitions, but the path to achieve them is the subject of heated contention.