Showing papers by "Peter N. Ireland published in 2001"
TL;DR: In this article, the authors focus on the specification and stability of a dynamic, stochastic, general equilibrium model of the American business cycle with sticky prices and find that the data prefer a version of the model in which adjustment costs apply to the price level but not to the inflation rate.
401 citations
TL;DR: In this article, the authors used maximum likelihood to estimate a prototypical real business cycle model under several different assumptions regarding the stochastic process governing technological change, and found that the data prefer a version of the model in which technology shocks are extremely persistent but still trend stationary.
59 citations
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TL;DR: A small, structural model of the monetary business cycle implies that real money balances enter into a correctly specified, forward-looking IS curve if and only if they enter into the correctly-specified, forwardlooking Phillips curve as discussed by the authors.
Abstract: A small, structural model of the monetary business cycle implies that real money balances enter into a correctly-specified, forward-looking IS curve if and only if they enter into a correctly-specified, forward-looking Phillips curve. The model also implies that empirical measures of real balances must be adjusted for shifts in money demand to accurately isolate and quantify the dynamic effects of money on output and inflation. Maximum likelihood estimates of the model's parameters take both of these considerations into account, but still suggest that money plays a minimal role in the monetary business cycle.
30 citations
TL;DR: In this article, the authors extend a conventional cash-in-advance model to incorporate a real balance effect of the kind described by de Scitovszky, Haberler, Pigou, and Patinkin.
Abstract: This paper extends a conventional cash-in-advance model to incorporate a real balance effect of the kind described by de Scitovszky, Haberler, Pigou, and Patinkin. When operative, this real balance effect eliminates the liquidity trap, allowing the central bank to control the price level even when the nominal interest rate hits its lower bound of zero. Curiously, the same mechanism that gives rise to the real balance effect also implies that monetary policies have distributional consequences that make some agents much worse off under a zero nominal interest rate than they are when the nominal interest rate is positive.
23 citations
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TL;DR: In this article, the authors extend a conventional cash-in-advance model to incorporate a real balance effect of the kind described by de Scitovszky, Haberler, Pigou, and Patinkin.
Abstract: This paper extends a conventional cash-in-advance model to incorporate a real balance effect of the kind described by de Scitovszky, Haberler, Pigou, and Patinkin. When operative, this real balance effect eliminates the liquidity trap, allowing the central bank to control the price level even when the nominal interest rate hits its lower bound of zero. Curiously, the same mechanism that gives rise to the real balance effect also implies that monetary policies have distributional consequences that make some agents much worse off under a zero nominal interest rate than they are when the nominal interest rate is positive.
7 citations