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dc.contributor.authorKarnizova, Liliaen_US
dc.date.accessioned2010-04-28en_US
dc.date.accessioned2010-04-30T12:16:59Z-
dc.date.available2010-04-30T12:16:59Z-
dc.date.issued2010en_US
dc.identifier.urihttp://hdl.handle.net/10419/30325-
dc.description.abstractSeparately, news and sunspot shocks have been shown empirically to be determinants of changes in expectations. This paper considers both of them together in a simple New Keynesian monetary business cycle model. A full set of rational expectations solutions is derived analytically. The analytical characterization allows an explicit comparison of news about future monetary policy and sunspots. The key distinction between the shocks lies in their relation to the realized policy shock. If monetary policy is 'passive', both types of shocks affect model dynamics through forecast errors. The effect of the news on forecast errors is not unique, and the dynamics induced by news and sunspot shocks can be observationally equivalent. If monetary policy is 'active', the sunspots are irrelevant, and the model responses to the news shocks are unique. In both cases, news shocks strengthen the endogenous propagation of the model, since anticipation of future changes prolongs agents' reaction.en_US
dc.language.isoengen_US
dc.publisherKiel Institute for the World Economy (IfW) Kielen_US
dc.relation.ispartofseriesEconomics Discussion Papers 2010-15en_US
dc.subject.jelE32en_US
dc.subject.jelE47en_US
dc.subject.jelE52en_US
dc.subject.ddc330en_US
dc.subject.keywordNews shocksen_US
dc.subject.keywordsunspotsen_US
dc.subject.keywordexpectationsen_US
dc.subject.keywordmonetary policyen_US
dc.subject.keywordindeterminacyen_US
dc.titleNews versus sunspot shocks in a New Keynesian modelen_US
dc.typeWorking Paperen_US
dc.identifier.ppn624789381en_US
dc.rights.licensehttp://creativecommons.org/licenses/by-nc/2.0/de/deed.en-
dc.identifier.repecRePEc:zbw:ifwedp:201015-
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