Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/209921 
Year of Publication: 
2009
Series/Report no.: 
Working Paper No. 2009/05
Publisher: 
Norges Bank, Oslo
Abstract: 
The lumpy nature of plant-level investment is generally not taken into account in the context of monetary theory (see, e.g., Christiano et al. 2005 and Woodford 2005). We formulate a generalized (S,s) pricing and investment model which is empirically more plausible along that dimension. Surprisingly, our main result shows that the presence of lumpy investment casts doubt on the ability of sticky prices to imply a quantitatively relevant monetary transmission mechanism.
Subjects: 
lumpy investment
sticky prices
JEL: 
E22
E31
E32
Persistent Identifier of the first edition: 
ISBN: 
978-82-7553-493-2
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Working Paper
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