Embodied Technology and Monetary Shocks; Lumps, Bumps, and Humps

John Stiver ()

No 2003-33, Working papers from University of Connecticut, Department of Economics

Abstract: VAR analysis of monetary shocks suggest that an unanticipated, positive money shocks cause a drop in nominal interest rates, and increases in output, consumption, prices, and wages. Further, impulse responses indicate a "hump shaped" pattern with the maximum effect felt 1-2 years after the initial shock. Limited participation models can replicate the contemporaneous correlations of money shocks, but have difficulty with the longer run dynamics. This paper integrates a limited participation framework in a vintage capital model in an attempt to strengthen the monetary transmission mechanism.

Pages: 33 pages
Date: 2003-06
New Economics Papers: this item is included in nep-dge and nep-mac
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Persistent link: https://EconPapers.repec.org/RePEc:uct:uconnp:2003-33

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