MARC Record from Library of Congress

LEADER: 02238cam a22003257a 4500
001 2005619295
003 DLC
005 20050706104809.0
007 cr |||||||||||
008 050701s2005 mnu sb f000 0 eng
010 $a 2005619295
040 $aDLC$cDLC
050 00 $aHB1
100 1 $aWang, Pengfei.
245 10 $aAnother look at sticky prices and output persistence$h[electronic resource] /$cby Peng-fei Wang and Yi Wen.
260 $a[St. Louis, Mo.] :$bFederal Reserve Bank of St. Louis,$c[2005]
490 1 $aWorking paper ;$v2005-051A
538 $aSystem requirements: Adobe Acrobat Reader.
538 $aMode of access: World Wide Web.
500 $aTitle from PDF file as viewed on 7/1/2005.
530 $aAlso available in print.
504 $aIncludes bibliographical references.
520 3 $a"Price rigidity is the key mechanism for propagating business cycles in traditional Keynesian theory. Yet the New Keynesian literature has failed to show that sticky prices by themselves can effectively propagate business cycles in general equilibrium. We show that price rigidity in fact can (by itself) give rise to a strong propagation mechanism of the business cycle in standard New Keynesian models, provided that investment is also subject to a cash-in-advance constraint. In particular, we show that reasonable price stickiness can generate highly persistent, hump-shaped movements in output, investment and employment in response to either monetary or non-monetary shocks, even if investment is only partially cash-in-advance constrained. Hence, whether or not price rigidity is responsible for output persistence (and the business cycle in general) may not be a theoretical question, but an empirical one"--Federal Reserve Bank of St. Louis web site.
650 0 $aBusiness cycles$xEconometric models.
650 0 $aPrices$xEconometric models.
653 $aBusiness cycle;$asticky prices;$aourput persistence;$acash-in-advance;$amoney-in-utility;$afinancing constraints and investment
700 1 $aWen, Yi.
710 2 $aFederal Reserve Bank of St. Louis.
830 0 $aWorking paper (Federal Reserve Bank of St. Louis : Online) ;$v2005-051A.
856 40 $uhttp://research.stlouisfed.org/wp/more/2005-051/