scholarly journals Inflation in the Great Recession and New Keynesian Models

2015 ◽  
Vol 7 (1) ◽  
pp. 168-196 ◽  
Author(s):  
Marco Del Negro ◽  
Marc P. Giannoni ◽  
Frank Schorfheide
Keyword(s):  
Monetary Policy ◽  
Great Recession ◽  
Economic Activity ◽  
Financial Frictions ◽  
New Keynesian ◽  
Dsge Models ◽  
Dsge Model ◽  
Macroeconomic Variables ◽  
The Great Recession ◽  
New Keynesian Models

Several prominent economists have argued that existing DSGE models cannot properly account for the evolution of key macroeconomic variables during and following the recent Great Recession. We challenge this argument by showing that a standard DSGE model with financial frictions available prior to the recent crisis successfully predicts a sharp contraction in economic activity along with a protracted but relatively modest decline in inflation, following the rise in financial stress in 2008:IV. The model does so even though inflation remains very dependent on the evolution of economic activity and of monetary policy. (JEL E12, E31, E32, E37, E44, E52, G01)

scholarly journals Inflation in the Great Recession and New Keynesian Models

2014 ◽  
Author(s):  
Marco Del Negro ◽  
Marc Giannoni ◽  
Frank Schorfheide
Keyword(s):  
Great Recession ◽  
New Keynesian ◽  
The Great Recession ◽  
New Keynesian Models

scholarly journals Fiscal and monetary policy in new Keynesian DSGE models

2014 ◽  
Author(s):  
Πέτρος Βαρθαλίτης
Keyword(s):  
Monetary Policy ◽  
Fiscal Policy ◽  
Open Economy ◽  
Small Open Economy ◽  
New Keynesian ◽  
Dsge Models ◽  
Dsge Model ◽  
Keynesian Model ◽  
Monetary And Fiscal Policy ◽  
Fiscal And Monetary Policy

This thesis is about monetary and fiscal policy in New Keynesian DSGE models. Chapter 2 presents the baseline New Keynesian DSGE model. Monetary policy is in the form of a simple interest rate Taylor-type policy rule, while fiscal policy is exogenous. Chapter 3 extends the model of Chapter 2 to include fiscal policy. Now, both monetary and fiscal policy are allowed to follow feedback rules. Chapter 4 sets up a New Keynesian model of a semi-small open economy with sovereign risk premia. Finally, Chapter 5 builds a New Keynesian DSGE model consisting of two heterogeneous countries participating in a monetary union.Throughout most of the thesis, policy is conducted via "simple", "implementable" and "optimized" feedback policy rules. Using such rules, the aim of policy is twofold: firslty, it aims to stabilize the economy when the latter is hit by shocks; secondly, it aims to improve the economy's resource allocation.

scholarly journals New Keynesian Liquidity Trap and Conventional Fiscal Stance: An Estimated DSGE Model

2019 ◽  
Vol 33 (1) ◽  
pp. 152-169
Author(s):  
Olatunji Abdul Shobande ◽  
Oladimeji Tomiwa Shodipe
Keyword(s):  
United States ◽  
Monetary Policy ◽  
Fiscal Policy ◽  
The United States ◽  
New Keynesian ◽  
Transmission Channel ◽  
Dsge Model ◽  
Liquidity Trap ◽  
Exogenous Shock ◽  
Macroeconomic Variables

Abstract The study investigates the effect of New Keynesian liquidity trap on fiscal stance in the United States, United Kingdom and Japan economies. We developed our DSGE model in the context of an optimal and persistent interactive fiscal policy, which allows us to track the transmission channel through which shocks are distributed among real economic variables. The evidence suggests that zero lower bound mitigates the ability of monetary policy to absorb the effect of exogenous shock on the macroeconomic variables while expansionary fiscal policy was able to absorb the shock persistence transmitted from the nominal interest rate.

scholarly journals Understanding the Great Recession

2015 ◽  
Vol 7 (1) ◽  
pp. 110-167 ◽  
Author(s):  
Lawrence J. Christiano ◽  
Martin S. Eichenbaum ◽  
Mathias Trabandt
Keyword(s):  
Great Recession ◽  
Economic Activity ◽  
New Keynesian ◽  
Factor Productivity ◽  
Working Capital ◽  
The Great Recession ◽  
Keynesian Model ◽  
Price Rigidities ◽  
The Cost ◽  
Joint Behavior

We argue that the vast bulk of movements in aggregate real economic activity during the Great Recession were due to financial frictions. We reach this conclusion by looking through the lens of an estimated New Keynesian model in which firms face moderate degrees of price rigidities, no nominal rigidities in wages, and a binding zero lower bound constraint on the nominal interest rate. Our model does a good job of accounting for the joint behavior of labor and goods markets, as well as inflation, during the Great Recession. According to the model the observed fall in total factor productivity and the rise in the cost of working capital played critical roles in accounting for the small drop in inflation that occurred during the Great Recession. (JEL E12, E23, E24, E31, E32, E52)

scholarly journals Some Notes on Historical, Theoretical, and Empirical Background of DSGE Models

2014 ◽  
Vol 14 (2) ◽  
pp. 145-164 ◽  
Author(s):  
Martin Slanicay
Keyword(s):  
Monetary Policy ◽  
Empirical Evidence ◽  
Paradigm Shift ◽  
New Keynesian ◽  
Dsge Models ◽  
Nominal Rigidities ◽  
Pros And Cons ◽  
New Keynesian Models ◽  
Rbc Models

Abstract In this paper I present the historical, theoretical and empirical background of DSGE models. I show that the fundament of these models lies in optimizing agents framework and argue which impulses fueled the development of DSGE models. I demonstrate the evolution of DSGE models with an accent on the role and effects of the monetary policy, using distinction between RBC models and New Keynesian models. I explain the paradigm shift from the RBC models to the New Keynesian models by pointing out the main pitfalls of the RBC models and showing how adding nominal rigidities to the otherwise standard RBC models enhances empirical properties of these models. I also discuss how nominal rigidities are modeled in New Keynesian DSGE models and what the pros and cons of different approaches are. Finally, I review the most important New Keynesian theories of nominal rigidities and some of the empirical evidence on price and wage rigidities

scholarly journals Quality of Life, Health and the Great Recession in Spain: Why Older People Matter?

2021 ◽  
Vol 18 (4) ◽  
pp. 2028
Author(s):  
Carla Blázquez-Fernández ◽  
David Cantarero-Prieto ◽  
Marta Pascual-Sáez
Keyword(s):  
Quality Of Life ◽  
Older People ◽  
Great Recession ◽  
Household Income ◽  
Macroeconomic Variables ◽  
Crisis Period ◽  
The Great Recession ◽  
Health Aging ◽  
Logistic Regressions

The financial crisis of 2008 precipitated the “Great Recession”. In this scenario, we took Spain as a country of study, because although it experienced significant negative shocks associated with macroeconomic variables (GDP or unemployment), its welfare indicators have been marked by limited changes. This study used data from waves 2 and 4 (years 2006–2007 and 2010–2012, respectively) of the Survey on Health, Aging and Retirement in Europe (SHARE). Specifically, through logistic regressions we have analysed the effects of socioeconomic, demographic, health and “Great Recession” factors on the quality of life (QoL) of elders in Spain. Although QoL did not change too much during the “Great Recession”, the results confirmed the importance of several factors (such as chronicity) that affect the satisfaction with the QoL among the older people. In this regard, statistically significant effects were obtained for individual exposure to recession. Therefore, a decrease in household income in the crisis period with respect to the pre-crisis period would increase by 44% the probability of reporting a low QoL (OR = 1.44; 95% CI: 1.00–2.07). Furthermore, gender differences were observed. Health and socioeconomic variables are the most significant when determining individual QoL. Therefore, when creating policies, establishing multidisciplinary collaborations is essential.

scholarly journals Monetary Policy after the Great Recession

2016 ◽  
Vol 64 (5) ◽  
pp. 627-629
Author(s):  
Hana Lipovská
Keyword(s):  
Monetary Policy ◽  
Great Recession ◽  
The Great Recession
Sign in / Sign up

Export Citation Format

Share Document