Structure from shocks

Michael Dotsey

No 99-06, Working Paper from Federal Reserve Bank of Richmond

Abstract: Arguments in favor of Keynesian models as opposed to real business cycle models are often made on the grounds that the correlations and impulse response patterns found in the latter are inconsistent with the data. A recent and prominent example of this reasoning is Gali (1999). But certain conclusions involve a certain joint hypothesis that implicitly assumes a certain characterization of monetary policy. This paper shows just how crucial the systematic portion of monetary policy is for interpreting many of the correlations and impulse response functions emphasized in the literature. Basically, the featured empirical facts are not useful for discerning the underlying price setting behavior of firms.

Keywords: Monetary policy; Business cycles; Financial crises; Prices (search for similar items in EconPapers)
Date: 1999
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (19)

Downloads: (external link)
http://www.richmondfed.org/publications/research/working_papers/1999/wp_99-6.cfm (text/html)
https://www.richmondfed.org/-/media/RichmondFedOrg ... /1999/pdf/wp99-6.pdf Full text (application/pdf)

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:fip:fedrwp:99-06

Ordering information: This working paper can be ordered from

Access Statistics for this paper

More papers in Working Paper from Federal Reserve Bank of Richmond Contact information at EDIRC.
Bibliographic data for series maintained by Christian Pascasio ().