Showing papers by "Robert E. Lucas published in 2003"
Posted Content•
TL;DR: This paper developed a model of a monetary economy in which individual firms are subject to idiosyncratic productivity shocks as well as general inflation, and calibrated this cost and the variance and autocorrelation of the idiosyncratic shock using a new U.S. data set of individual prices due to Klenow and Kryvtsov.
Abstract: This paper develops a model of a monetary economy in which individual firms are subject to idiosyncratic productivity shocks as well as general inflation. Sellers can change price only by incurring a real menu cost.' We calibrate this cost and the variance and autocorrelation of the idiosyncratic shock using a new U.S. data set of individual prices due to Klenow and Kryvtsov. The prediction of the calibrated model for the effects of high inflation on the frequency of price changes accords well with the Israeli evidence obtained by Lach and Tsiddon. The model is also used to conduct numerical experiments on the economy's response to credible and incredible disinflations and other shocks. In none of the simulations we conducted did monetary shocks induce large or persistent real responses.
639 citations
Posted Content•
TL;DR: This article developed a model of a monetary economy in which individual firms are subject to idiosyncratic productivity shocks as well as general inflation, and calibrated this cost and the variance and autocorrelation of the idiosyncratic shock using a new U.S. data set of individual prices due to Klenow and Kryvtsov.
Abstract: This paper develops a model of a monetary economy in which individual firms are subject to idiosyncratic productivity shocks as well as general inflation. Sellers can change price only by incurring a real menu cost.' We calibrate this cost and the variance and autocorrelation of the idiosyncratic shock using a new U.S. data set of individual prices due to Klenow and Kryvtsov. The prediction of the calibrated model for the effects of high inflation on the frequency of price changes accords well with the Israeli evidence obtained by Lach and Tsiddon. The model is also used to conduct numerical experiments on the economy's response to credible and incredible disinflations and other shocks. In none of the simulations we conducted did monetary shocks induce large or persistent real responses.
84 citations
TL;DR: The remarkable economic growth in die post-colonial period has been a mix of continued steady growdi of the already rich countries, growth at higher, catch-up rates by some odiers, and continued stagnation or worse by some of the preindustrial societies that have been left behind as discussed by the authors.
Abstract: During the forty year period 1950-1990 world population grew at an annual rate of just under 2%, and total production of goods and services grew at 4%. This means diat production per person grew at more than 2%, implying diat income per person more than doubled over these years. These figures refer to the entire world, rich and poor alike. I have not left out die communist countries or Africa or anyone else. Nodiing remotely like this has ever been seen before.1 The remarkable economic growth in die post-colonial period has been a mix of continued steady growdi ofthe already-rich countries, growth at higher, catch-up rates by some odiers, and continued stagnation or worse by some of the preindustrial societies that have been left behind. These differences have attracted a lot ofattention from economists. Detailed worldwide data sets have been created, and patterns have been sought that might reveal why some societies have thrived in this
2 citations