Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/82330
Authors: 
Furlanetto, Francesco
Seneca, Martin
Year of Publication: 
2007
Series/Report no.: 
Danmarks Nationalbank Working Papers 48
Abstract: 
In this paper we study the transmission mechanism of productivity shocks in a model with rule-of-thumb consumers. In the literature, this financial friction has been studied only with reference to fiscal shocks. We show that the presence of rule-of-thumb consumers is also very helpful in accounting for recent empirical evidence on productivity shocks. Rule-of-thumb agents, together with nominal and real rigidities, play an important role in reproducing the negative response of hours and the delayed responses of output and consumption after a productivity shock.
Subjects: 
rule-of-thumb consumers
productivity shocks
nominal rigidities
real rigidities
JEL: 
E32
Document Type: 
Working Paper

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