Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/149371
Authors: 
Langer, Viktoria C. E.
Year of Publication: 
2015
Series/Report no.: 
Hamburg Contemporary Economic Discussions 53
Abstract: 
Extending and modifying the canonical New Keynesian (NK) model, this study provides a novel approach to examine the impact of anticipated shocks called "news shocks" on business cycles. The analysis shows that news shocks are less stressful for an economy than commonly assumed. The main results are as follows: (1) triggering lower economic fluctuations than unanticipated shocks of equal size news shocks behave in a welfare-enhancing manner, and (2) purely history-dependent monetary policy rules do not constitute an effective monetary instrument to keep welfare losses to a minimum.
Subjects: 
Anticipated shock
welfare
business cycle
monetary policy
JEL: 
E32
E52
ISBN: 
978-3-942820-21-9
Document Type: 
Working Paper

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