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https://hdl.handle.net/10419/23189
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DC Field | Value | Language |
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dc.contributor.author | Occhino, Filippo | en |
dc.date.accessioned | 2009-01-29T15:49:26Z | - |
dc.date.available | 2009-01-29T15:49:26Z | - |
dc.date.issued | 2004 | - |
dc.identifier.uri | http://hdl.handle.net/10419/23189 | - |
dc.description.abstract | In the data, after a contractionary monetary policy shock aggregate output decreases over time, with a trough after four to eight quarters. This paper replicatesthe `hump-shaped' response of output with a segmented markets model where part ofthe households are excluded from financial markets. A contractionary monetary policy shock is modeled as an unanticipated increase in the short-term nominal interest rate. Since households and firms need cash-in-advance to purchase consumption andhire labor, an increase in the nominal interest rate discourages the households' consumption demand and labor supply, and the firms' labor demand. In a benchmark fullparticipation model, the effect is strongest in the impact period, and decays over time.When markets are segmented, however, the shock has an additional liquidity effect,increasing the real interest rate above fundamentals, and decreasing the growth rateof the participants' labor supply. As a result, the response of the aggregate labor andoutput has a trough several quarters after the shock. The model is able to replicatethe sign, the magnitude and the persistence of the responses of output, money, pricesand interest rates. It can generate a positive response of the real interest rate togetherwith a negative response of the output growth rate. | en |
dc.language.iso | eng | en |
dc.publisher | |aRutgers University, Department of Economics |cNew Brunswick, NJ | en |
dc.relation.ispartofseries | |aWorking Paper |x2004-10 | en |
dc.subject.jel | E52 | en |
dc.subject.ddc | 330 | en |
dc.subject.keyword | limited participation | en |
dc.subject.keyword | segmented markets | en |
dc.subject.keyword | hump-shaped delayed response | en |
dc.subject.keyword | monetary policy shocks | en |
dc.subject.keyword | persistence | en |
dc.subject.stw | Marktsegmentierung | en |
dc.subject.stw | Geldpolitik | en |
dc.subject.stw | Schock | en |
dc.subject.stw | Cash-in-Advance-Modell | en |
dc.subject.stw | Arbeitsangebot | en |
dc.title | Market Segmentation and the `Hump-Shaped' Response of Output to Monetary Policy Shocks | - |
dc.type | Working Paper | en |
dc.identifier.ppn | 389549746 | en |
dc.rights | http://www.econstor.eu/dspace/Nutzungsbedingungen | en |
dc.identifier.repec | RePEc:rut:rutres:200410 | en |
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