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Nominal Rigidities in Debt and Product Markets / Carlos Garriga, Finn E. Kydland, Roman Šustek.
- Format:
- Book
- Author/Creator:
- Garriga, Carlos.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w22613.
- NBER working paper series no. w22613
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2016.
- Summary:
- Standard models used for monetary policy analysis rely on sticky prices. Recently, the literature started to explore also nominal debt contracts. Focusing on mortgages, this paper compares the two channels of transmission within a common framework. The sticky price channel is dominant when shocks to the policy interest rate are temporary, the mortgage channel is important when the shocks are persistent. The first channel has significant aggregate effects but small redistributive effects. The opposite holds for the second channel. Using yield curve data decomposed into temporary and persistent components, the redistributive and aggregate consequences are found to be quantitatively comparable.
- Notes:
- Print version record
- September 2016.
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