Generating Real Persistent Effects of Monetary Shocks: How Much Nominal Rigidity Do We Really Need? / Olivier Jeanne.

Format:

Book

Author/Creator:

Jeanne, Olivier.

Contributor:

National Bureau of Economic Research.

Series:

Working Paper Series (National Bureau of Economic Research) no. w6258.

NBER working paper series no. w6258

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Generating Real Persistent Effects of Monetary Shocks

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1997.

Summary:

This paper attempts to assess whether money can generate persistent economic" fluctuations in dynamic general equilibrium models of the business cycle. We show that a small" nominal friction in the goods market can make the response of output to monetary shocks large" and persistent if it is amplified by real wage rigidity in the labor market. We also argue that" given the level of real wage rigidity that is observed in developed countries nominal stickiness might be sufficient for money to produce economic fluctuations as persistent" as those observed in the data.

Notes:

Print version record

November 1997.