Delayed Adjustment and Persistence in Macroeconomic Models
Thijs van Rens and
Marija Vukotić
Journal of Money, Credit and Banking, 2023, vol. 55, issue 6, 1325-1356
Abstract:
Estimated impulse responses of investment and hiring typically peak well after the impact of a shock. Standard models with adjustment costs in capital and labor do not exhibit such delayed adjustment, but we argue that it arises naturally when we relax the assumption that the production technology is separable over time. This result, which holds for both convex and nonconvex cost functions, is strong enough to match the persistence observed in the data for reasonable parameter values. We discuss some evidence for our explanation and ways to test it.
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:
Downloads: (external link)
https://doi.org/10.1111/jmcb.13011
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: https://EconPapers.repec.org/RePEc:wly:jmoncb:v:55:y:2023:i:6:p:1325-1356
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 ().