EconStor >
Eidgenössische Technische Hochschule (ETH) Zürich >
KOF Konjunkturforschungsstelle, ETH Zürich >
KOF Working Papers, KOF Konjunkturforschungsstelle, ETH Zürich >

Please use this identifier to cite or link to this item:

http://hdl.handle.net/10419/50395
  
Title:The speed of adjustment to demand shocks: A Markov-chain measurement using micro panel data PDF Logo
Authors:Müller, Christian
Köberl, Eva
Issue Date:2007
Series/Report no.:KOF working papers // Konjunkturforschungsstelle, Eidgenössische Technische Hochschule Zürich 170
Abstract:In this paper we measure the speed at which firms adjust to demand shocks using individual firm data. Identification of shocks is achieved by a combination of quantitative and qualitative judgments on capacity utilisation in micro survey data. A novel feature of our approach is the distinction between positive and negative shocks that allows us to also discriminate between the speed of adjustment following either kind of shock. Furthermore, there is no need for using previous data filtering to extract business cycles or equilibrium definitions but only to observe the states of the firms that define their economic situation. One main result is that the firms' adjustment to these two shocks is varying in speed. It should therefore be paid regard to the separation of positive and negative shocks in empirical and theoretical models. The findings of this paper bear implications for monetary policy making and model building alike.
Subjects:demand shock
Markov-chain
microfoundation
JEL:E32
C4
C5
Document Type:Working Paper
Appears in Collections:KOF Working Papers, KOF Konjunkturforschungsstelle, ETH Zürich

Files in This Item:
File Description SizeFormat
583153607.pdf266.61 kBAdobe PDF
No. of Downloads: Counter Stats
Download bibliographical data as: BibTeX
Share on:http://hdl.handle.net/10419/50395

Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.