New Keynesian models, durable goods, and collateral constraints

Tommaso Monacelli

Journal of Monetary Economics, 2009, vol. 56, issue 2, pages 242-254

Abstract: Econometric evidence suggests that, in response to monetary policy shocks, durable and non-durable spending co-move positively, and durable spending exhibits a much larger sensitivity to the shocks. A standard two-sector New Keynesian model with perfect financial markets is at odds with these facts. The introduction of a borrowing constraint, where durables play the role of collateral assets, helps in reconciling the model with the empirical evidence.

Keywords: Durable; goods; Sticky; prices; Collateral; constraint (search for similar items in EconPapers)
Date: 2009
View citations in EconPapers

Downloads: (external link)
http://www.sciencedirect.com/science/article/B6VBW ... 65dd45ef0db3b7325c38
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:eee:moneco:v:56:y:2009:i:2:p:242-254

Access Statistics for this article

Journal of Monetary Economics is edited by R. G. King and C. I. Plosser

More articles in Journal of Monetary Economics from Elsevier
Series data maintained by Heidi Boesdal ().