| Article ID | Journal | Published Year | Pages | File Type |
|---|---|---|---|---|
| 5060744 | Economics Letters | 2012 | 5 Pages |
Abstract
Euler equations are the key link between monetary policy and the real economy in NK models. Under separable preferences, they fail to match interest rates. Non-separability between leisure and consumption significantly improves their fit and reliability for studying monetary policy.
⺠Euler equations link monetary policy and the real economy in NK models. ⺠Under separable preferences, they fail to match interest rates. ⺠Non-separability between leisure and consumption significantly improves their fit. ⺠It also improves their reliability for studying monetary policy.
Keywords
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Fabrice Collard, Harris Dellas,