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E-book
Author Rabanal, Pau, author

Title The cost channel of monetary policy : further evidence for the United States and the euro area / Pau Rabanal
Published Washington, D.C. : International Monetary Fund, [2003]
©2003
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Description 1 online resource (34 pages) : illustrations
Series IMF working paper ; WP/03/149
IMF working paper ; WP/03/149
Summary This paper estimates the importance of the cost channel of monetary policy in a New Keynesian model of the business cycle. A model with nominal rigidities is extended by assuming that a fraction of firms need to borrow money to pay their wage bill. Hence, monetary policy tightenings increase effective unit labor costs of production, and might imply an increase in inflation. The model explains the joint dynamics of output, inflation, real wages, and interest rates, and is estimated using a Bayesian framework and data for the United States and the euro area. The main result is that cost channel effects are absent in both cases. Moreover, it is not possible to obtain a "price puzzle" type of behavior from estimated impulse responses to monetary policy shocks
Bibliography Includes bibliographical references (pages 32-34)
Notes Master and use copy. Digital master created according to Benchmark for Faithful Digital Reproductions of Monographs and Serials, Version 1. Digital Library Federation, December 2002. http://purl.oclc.org/DLF/benchrepro0212 MiAaHDL
digitized 2010 HathiTrust Digital Library committed to preserve pda MiAaHDL
Print version record
Subject Inflation (Finance) -- European Union countries -- Econometric models.
Inflation (Finance) -- United States -- Econometric models.
Labor costs -- European Union countries -- Econometric models.
Labor costs -- United States -- Econometric models.
Monetary policy -- Economic aspects -- European Union countries -- Econometric models.
Monetary policy -- Economic aspects -- United States -- Econometric models.
Form Electronic book
Author International Monetary Fund. Monetary and Financial Systems Department.
ISBN 1451902018
9781451902013