scholarly journals Technology and the two margins of labor adjustment: a New Keynesian perspective

2019 ◽  
Vol 20 (1) ◽  
Author(s):  
Francesco Furlanetto ◽  
Tommy Sveen ◽  
Lutz Weinke
Keyword(s):  
Capital Accumulation ◽  
Robustness Analysis ◽  
New Keynesian ◽  
Extensive Margin ◽  
Technology Shocks ◽  
New Keynesian Model ◽  
Keynesian Model ◽  
Labor Adjustment ◽  
Market Variables ◽  
Economic Journal

Abstract Canova et al. [Canova, F., J. D. López-Salido, and C. Michelacci. 2010. “The Effects of Technology Shocks on Hours and Output: A Robustness Analysis.” Journal of Applied Econometrics 25: 755–773; Canova, F., J. D. López-Salido, and C. Michelacci. 2012. “The Ins and Outs of Unemployment: An Analysis Conditional on Technology Shocks.” The Economic Journal 123: 515–539] estimate the dynamic response of labor market variables to technological shocks. They show that investment-specific shocks imply predominantly an adjustment along the intensive margin (i.e., hours per worker), whereas for neutral shocks the largest share of the adjustment takes place along the extensive margin (i.e., employment). In this paper we develop a New Keynesian model featuring capital accumulation, two margins of labor adjustment and a hiring cost. The model is used to analyze a novel economic mechanism to explain that evidence.

Trend inflation and monetary policy rules: determinacy analysis in New Keynesian model with capital accumulation

2015 ◽  
Vol 15 (1) ◽  
Author(s):  
Elena Gerko ◽  
Kirill Sossounov
Keyword(s):  
Capital Accumulation ◽  
New Keynesian ◽  
Positive Trend ◽  
Price Setting ◽  
New Keynesian Model ◽  
Time Analysis ◽  
Interest Rate Policy ◽  
Keynesian Model ◽  
Trend Inflation ◽  
Rate Policy

AbstractThe paper analyzes the effect of positive trend inflation in the framework of a standard New Keynesian model with Calvo price setting and capital accumulation. We are building on the work of Carlstrom and Fuerst (Carlstrom, Charles T., and Timothy S. Fuerst. 2005. “Investment and Interest Rate Policy: A Discrete-Time Analysis.”

scholarly journals Public Debt and Changing Inflation Targets

2016 ◽  
Vol 8 (4) ◽  
pp. 142-176 ◽  
Author(s):  
Michael U. Krause ◽  
Stéphane Moyen
Keyword(s):  
Central Bank ◽  
Public Debt ◽  
Pronounced Effect ◽  
New Keynesian ◽  
Moderate Increase ◽  
New Keynesian Model ◽  
Inflation Target ◽  
Keynesian Model ◽  
Maturity Structure ◽  
Inflation Targets

What are the effects of a higher central bank inflation target on the burden of real public debt? Several recent proposals have suggested that even a moderate increase in the inflation target can have a pronounced effect on real public debt. We consider this question in a New Keynesian model with a maturity structure of public debt and an imperfectly observed inflation target. We find that moderate changes in the inflation target only have significant effects on real public debt if they are essentially permanent. Moreover, the additional benefits of not communicating a change in the inflation target are minor. (JEL E12, E31, E52, H63)

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