Investment Price Rigidities and Business Cycles

Alban Moura

No 15-612, TSE Working Papers from Toulouse School of Economics (TSE)

Abstract: I incorporate investment price rigidity in a two-sector monetary model of business cycles. Fit to quarterly U.S. time series, the model suggests that price sluggishness in the investment sector is the single most empirically relevant friction to match the data. Sticky investment prices constitute an important propagation mechanism to understand the sources of aggregate fluctuations, the dynamic effects of technology shocks, and the properties of the relative price of investment goods.

Keywords: multisector DSGE model; investment price stickiness; relative price of investment (search for similar items in EconPapers)
JEL-codes: E3 E5 (search for similar items in EconPapers)
Date: 2015-11
New Economics Papers: this item is included in nep-dge and nep-mac
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Related works:
Journal Article: Investment Shocks, Sticky Prices, and the Endogenous Relative Price of Investment (2018)
Working Paper: Investment price rigidity and business cycles (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:tse:wpaper:29964

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