Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
966508 | Journal of Monetary Economics | 2013 | 14 Pages |
Abstract
The lumpy nature of plant-level investment is generally not taken into account in the context of New Keynesian monetary theory (see, e.g., Christiano et al., 2005; Woodford, 2005). Our main result shows that if this theory is augmented by a standard model of lumpy investment, monetary policy shocks lead to large but very short-lived impacts on output and inflation, in a way that goes against empirical evidence and the consensus view in the literature.
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Economics and Econometrics
Authors
Michael Reiter, Tommy Sveen, Lutz Weinke,