The Neo-Fisher Effect: Econometric Evidence from Empirical and Optimizing Models / Martín Uribe.

Format:

Book

Author/Creator:

Uribe, Martín.

Contributor:

National Bureau of Economic Research.

Series:

Working Paper Series (National Bureau of Economic Research) no. w25089.

NBER working paper series no. w25089

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Neo-Fisher Effect

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2018.

Summary:

This paper investigates whether permanent monetary tightenings increase inflation in the short run. It estimates, using U.S. data, an empirical and a New-Keynesian model driven by transitory and permanent monetary and real shocks. Temporary increases in the nominal interest-rate lead, in accordance with conventional wisdom, to a decrease in inflation and output and an increase in real rates. The main result of the paper is that permanent increases in the nominal interest rate lead to an immediate increase in inflation and output and a decline in real rates. Permanent monetary shocks explain more than 40 percent of inflation changes.

Notes:

Print version record

September 2018.