EconPapers    
Economics at your fingertips  
 

Business Cycle Implications of Internal Consumption Habit for New Keynesian Models

Takashi Kano () and James Nason ()

Journal of Money, Credit and Banking, 2014, vol. 46, issue 2-3, 519-544

Abstract: We study the implications of internal consumption habit for New Keynesian dynamic stochastic general equilibrium (NKDSGE) models. Bayesian Monte Carlo methods are employed to evaluate NKDSGE model fit. Simulation experiments show that internal consumption habit often improves the ability of NKDSGE models to match the spectra of output and consumption growth. Nonetheless, the fit of NKDSGE models with internal consumption habit is susceptible to the sources of nominal rigidity, to spectra identified by permanent productivity shocks, to the choice of monetary policy rule, and to the frequencies used for evaluation. These vulnerabilities indicate that the specification of NKDSGE models is fragile.

Date: 2014
References: Add references at CitEc
Citations: View citations in EconPapers (3) Track citations by RSS feed

Downloads: (external link)
http://hdl.handle.net/10.1111/jmcb.12115

Related works:
Working Paper: Business cycle implications of internal consumption habit for new Keynesian models (2013) Downloads
Working Paper: Business Cycle Implications of Internal Consumption Habit for New Keynesian Models (2012) Downloads
Working Paper: Business Cycle Implications of Internal Consumption Habit for New Keynesian Models (2010) Downloads
Working Paper: Business Cycle Implications of Internal Consumption Habit for New Keynesian Model (2009) Downloads
Working Paper: Business cycle implications of internal consumption habit for New Keynesian models (2009) Downloads
Working Paper: Business Cycle Implications of Internal Consumption Habit for New Keynesian Models (2009) Downloads
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: https://EconPapers.repec.org/RePEc:wly:jmoncb:v:46:y:2014:i:2-3:p:519-544

Access Statistics for this article

Journal of Money, Credit and Banking is currently edited by Robert deYoung, Paul Evans, Pok-Sang Lam and Kenneth D. West

More articles in Journal of Money, Credit and Banking from Blackwell Publishing
Bibliographic data for series maintained by Wiley Content Delivery ().

 
Page updated 2019-08-03
Handle: RePEc:wly:jmoncb:v:46:y:2014:i:2-3:p:519-544