Journal ArticleDOI
Staggered prices in a utility-maximizing framework
TLDR
In this article, the authors developed a model of staggered prices along the lines of Phelps (1978) and Taylor (1979, 1980), but utilizing an analytically more tractable price-setting technology.About:
This article is published in Journal of Monetary Economics.The article was published on 1983-09-01. It has received 8580 citations till now. The article focuses on the topics: Nominal rigidity & Taylor rule.read more
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Clearing Up the Fiscal Multiplier Morass
TL;DR: In this article, a prior predictive analysis of five nested DSGE models suggests that model specifications and prior distributions tightly circumscribe the range of possible government spending multipliers, revealing less about fiscal effects in data than about the lenses through which researchers choose to interpret data.
Journal ArticleDOI
Money, Sticky Wages, and the Great Depression
TL;DR: This paper examined the ability of a simple stylized general equilibrium model that incorporates nominal wage rigidity to explain the magnitude and persistence of the Great Depression in the United States, and provided support for the hypothesis that a monetary contraction operating through a sticky wage channel played a significant role in accounting for the downturn, and also provided an interesting refinement to this explanation.
Journal ArticleDOI
Monetary-Fiscal Policy Interactions and Fiscal Stimulus
TL;DR: In this article, the authors estimate Markov-switching policy rules for the United States and find that monetary and fiscal policies fluctuate between active and passive behavior, and report the model's predictions of the macroeconomic impacts of the American Recovery and Reinvestment Act's implied path for government spending under alternative monetary-fiscal policy combinations.
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Fiscal and monetary rules for a currency union
TL;DR: In this paper, the optimal joint conduct of fiscal and monetary policy in a two-country model of a currency union with staggered price setting and distortionary taxes is studied, and a tractable linear-quadratic approximation of the optimal policy plan in terms of targeting rules is provided.
Journal ArticleDOI
The Dynamic Behavior of the Real Exchange Rate in Sticky Price Models
TL;DR: A large recent literature has studied whether the volatility and persistence of real exchange rates can be understood in the context of sticky price models with staggered price setting as mentioned in this paper, and concluded that such models can explain the volatility of the real exchange rate but that they cannot match its persistence.
References
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The Theory of Matrices
TL;DR: In this article, the Routh-Hurwitz problem of singular pencils of matrices has been studied in the context of systems of linear differential equations with variable coefficients, and its applications to the analysis of complex matrices have been discussed.
Journal ArticleDOI
Aggregate Dynamics and Staggered Contracts
TL;DR: In this article, the authors show that staggered wage contracts as short as 1 year are capable of generating the type of unemployment persistence which has been observed during postwar business cycles in the United States.
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"Rational" Expectations, the Optimal Monetary Instrument, and the Optimal Money Supply Rule
Thomas J. Sargent,Neil Wallace +1 more
TL;DR: In this paper, alternative monetary policies are analyzed in an ad hoc macroeconomic model in which the public's expectations about prices are rational, and it turns out that the probility distribution of output is independent of the particular deterministic money supply rule in effect.
Book
Public Investment, the Rate of Return, and Optimal Fiscal Policy
Kenneth J. Arrow,Mordecai Kurz +1 more
TL;DR: In this paper, a theory of "controllability" is developed and injected into public economics and growth models to analyze optimal public expenditures in the context of modern growth theory, and a model of optimal growth with public capital is proposed.