Technology Shocks in the New Keynesian Model

Peter Ireland ()

No 536, Boston College Working Papers in Economics from Boston College Department of Economics

Abstract: In a New Keynesian model, technology and cost-push shocks compete as terms that stochastically shift the Phillips curve. A version of this model, estimated via maximum likelihood, points to the cost-push shock as far more important than the technology shock in explaining the behavior of output, inflation, and interest rates in the postwar United States data. These results weaken the links between the current generation of New Keynesian models and the real business cycle models from which they were originally derived; they also suggest that Federal Reserve ocials have often faced dicult trade-offs in conducting monetary policy.

Keywords: technology shocks; New Keynesian Models (search for similar items in EconPapers)
JEL-codes: E32 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dge
Date: 2002-08-13
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Working Paper: Technology Shocks in the New Keynesian Model (2004)
Journal Article: Technology Shocks in the New Keynesian Model (2004)
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Persistent link: http://EconPapers.repec.org/RePEc:boc:bocoec:536

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