Autori
Farmer, Roger E. A.
Benhabib, Jess

Titolo
The monetary transmission mechanism
Periodico
European University Institute of Badia Fiesolana (Fi). Department of Economics - Working papers
Anno: 1999 - Fascicolo: 35 - Pagina iniziale: 1 - Pagina finale: 81

Since thè writing of David Hume, in thè eighteenth century, there has been generai agreement amongst economists that an increase in thè stock of mone leads, initially, to an increase in economie activity. Output and employment go u] thè interest rate declines and prices respond weakly, if at ali, to an increase in th quantity of money. Over lime, these real effects die out and, in thè long run, th only effect of higher money is higher prices. Most writers on thè topic hav attributed thè real effects of money, in thè short run, to mistaken expectation; non-market clearing or both. We argue instead, that neither of these channels i needed to explain thè facts. "We show that a competitive market-clearing model i: which money enters thè production function can reproduce thè broad features o data. Our argument relies on an explanation of "price stickiness" that exploits multiplicity of equilibria in a rational-expectations model.T



Testo completo: http://www.iue.it/ECO/WP-Texts/ECO99-35.pdf

Esportazione dati in Refworks (solo per utenti abilitati)