Showing papers in "Journal of Monetary Economics in 2007"

TL;DR: The authors compare wealth holdings across two cohorts of the Health and Retirement Study: the early Baby Boomers in 2004, and individuals in the same age group in 1992, and find that planners in both cohorts arrive close to retirement with much higher wealth levels and display higher financial literacy than non-planners.

TL;DR: In this article, the authors investigated the response of household consumption to house prices using UK micro data and found that the largest effect of house prices on consumption for older homeowners and the smallest effect, insignificantly different from zero, for younger renters.

TL;DR: In this article, welfare-maximizing monetary and fiscal-policy rules are studied in a model with sticky prices, money, and distortionary taxation, and the main findings are that the size of the inflation coefficient in the interest-rate rule plays a minor role for welfare.

TL;DR: In this article, the authors consider generic Taylor-type rules, where the monetary authority reacts in response to output, inflation, and exchange-rate movements, and find that terms-of-trade movements do not contribute significantly to domestic business cycles.

TL;DR: In this paper, error-correction-type policy reaction functions are suggested as more promising for understanding deficit problems, which are consistent with the inter-temporal budget constraint, i.e., the constraint proves to be satisfied if either the debt series or the revenue and with-interest spending series are integrated of arbitrarily high order.

TL;DR: The authors showed that external shocks are an important source of macroeconomic fluctuations in emerging markets and that U.S. monetary policy shocks affect interest rates and the exchange rate in a typical emerging market quickly and strongly.

TL;DR: In this paper, a political economy model is presented in which equilibrium inflation is positively related to the degree of inequality in income due to the relative vulnerability to inflation of low income households.

TL;DR: This paper explore the role of real wage dynamics in a New Keynesian business cycle model with search and matching frictions in the labor market and show that the model fails to generate a Beveridge curve: vacancies and unemployment are positively correlated.

TL;DR: In this paper, a dynamic factor model was used to disentangle the relative importance of the common component in house price movements from local (state- or region-specific) shocks.

TL;DR: In this paper, the authors present an estimated model that departs from rational expectations and nests learning by economic agents, habits, and indexation, showing that when learning replaces rational expectations, the estimated degrees of habits and inflation indexation drop closer to zero, suggesting that persistence arises in the model economy mainly from expectations and learning.

TL;DR: In this paper, the properties of G-7 cycles using a multicountry Bayesian panel VAR model with time variations, unit specific dynamics and cross country interdependences are examined.

TL;DR: In most poor countries, large fractions of land, labor, and other productive resources are devoted to producing food for subsistence needs as discussed by the authors, which can explain why some countries started to realize increases in per capita output more than 250 years later in history than others.

TL;DR: In this article, the authors study a variation of the Eaton-Kortum model, a competitive, constant-returns-to-scale multicountry Ricardian model of trade.

TL;DR: The authors developed a new approach to identify macroeconomic shocks that exploits model-based empirical shock measures, and found little evidence that fiscal policy shocks are an important source of interest rate variability.

TL;DR: The authors showed that even low trend inflation has strong effects on optimal monetary policy and the dynamics of inflation, output, and interest rates, and that targeting non-zero trend inflation leads to substantial welfare losses.

TL;DR: The authors evaluate the treatment effect of inflation targeting in seven industrial countries that adopted this policy in the 1990s and show that it has no significant effects on either inflation or inflation variability in these seven countries.

TL;DR: In this paper, the authors find that increased longevity raises aggregate savings rates in countries with universal pension coverage and retirement incentives, though the effect disappears for countries with pay-as-you-go systems and high replacement rates.

TL;DR: This paper studied the portfolio behavior of bank loans following a monetary tightening and found that real estate and consumer loans sharply decrease, while commercial and industrial (C&I) loans increase during a "non-monetary" downturn.

TL;DR: In this article, a stochastic forward-looking model with an occasionally binding lower bound, calibrated to the U.S. economy, suggests that low values for the natural rate of interest lead to sizeable output losses and deflation under discretionary monetary policy.

TL;DR: In this paper, the authors used demographic projections together with a large scale multi-country Overlapping Generations Model with uninsurable idiosyncratic uncertainty to quantify the distributional and welfare consequences of these changes in factor prices induced by the demographic transition.

TL;DR: The authors assesses the empirical performance of the Calvo style models of price re-optimization and show that these models imply plausible degrees of inertia in price setting behavior by firms, but only if they depart from two standard auxiliary assumptions: monopolistically competitive firms face a constant elasticity of demand and capital is homogeneous and can be instantaneously reallocated after a shock.

TL;DR: In this article, the authors studied the pattern of price dispersion across European and US cities from 1990 to 2004 and found that there is a striking decline in dispersion for traded goods prices in Europe, most of which took place prior to the launch of the euro.

TL;DR: The authors extended and refined the calibration methodology along several important dimensions, such as accounting for home production is important both in measuring calibration targets and in organizing the data in a model-consistent fashion.

TL;DR: In this paper, the effects of technology shocks in VAR models of the U.S., identified by imposing restrictions on the sign of impulse responses, are estimated by imposing a hump-shaped pattern.

TL;DR: The desirability of monetary constraints in monetary unions depends critically on whether the monetary authority can commit to following its policies as discussed by the authors, and if it cannot commit, then fiscal policy has a free-rider problem, and debt constraints may be desirable.

TL;DR: In this article, the authors examine the performance and robustness properties of monetary policy rules in an estimated macroeconomic model in which the economy undergoes structural change and where private agents and the central bank possess imperfect knowledge about the true structure of the economy.

TL;DR: In this paper, the authors provide a new quantitative benchmark of analysis for this question represented by a two-region model (South and North) of the world economy where capital flows across regions.

TL;DR: In this article, the authors study the optimal nominal demand policy in a flexible price economy with imperfect common knowledge about the shocks hitting the economy and find that policy should nominally accommodate white noise mark-up shocks for a large range of capacity values.

TL;DR: In this article, a search model is proposed to match hours, employment, vacancies and unemployment at the micro-and macro-levels, and a set of facts concerning the variability of unemployment and vacancies in the aggregate and the distribution of net employment growth are established.

TL;DR: In this article, the authors propose a simple framework for analyzing a continuum of monetary policy rules characterized by differing degrees of credibility, in which commitment and discretion become special cases of what they call quasi commitment.