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Working Paper
Sticky prices, money, and business fluctuations
Can nominal contracts create monetary nonneutrality if they arise endogenously in general equilibrium? Yes, if (1) agents have complete information about the money stock and (2) shocks to the system are purely redistributive and private information, precluding conventional insurance markets. Without contracts, money is neutral toward aggregate quantities. However, risk-sharing between suppliers and demanders creates an incentive for both parties to use nominal contracts. in particular, if an increase in the money growth rate signals a rise in the dispersion of shocks to demanders' wealth, ...
Working Paper
Testing long run neutrality
Conference Paper
Money and business cycles
Journal Article
The new IS-LM model : language, logic, and limits
Conference Paper
Inflation targeting in a St. Louis model of the 21st century
Working Paper
Stochastic trends and economic fluctuations
Journal Article
Quantitative theory and econometrics
Report
Partial adjustment without apology
Many kinds of economic behavior involve discrete and occasional individual choices. Despite this, econometric partial adjustment models perform relatively well at the aggregate level. Analyzing the classic employment adjustment problem, we show how such microeconomic adjustment is well described by a new form of partial adjustment model that aggregates the actions of heterogeneous producers. ; We develop a model where individual establishments infrequently alter the sizes of their workforces because such adjustments involve fixed costs. In the market equilibrium, employment responses to ...