scholarly journals Monetary Policy with Sectoral Linkages and Durable Goods

2012 ◽  
Author(s):  
Ivan Petrella ◽  
Raffaele Rossi ◽  
Emiliano Santoro
Keyword(s):  
Monetary Policy ◽  
Durable Goods ◽  
Sectoral Linkages

scholarly journals Durable Goods, Inter-Sectoral Linkages and Monetary Policy

2008 ◽  
Author(s):  
Hafedh Bouakez ◽  
Emanuela Cardia ◽  
Francisco J. Ruge-Murcia
Keyword(s):  
Monetary Policy ◽  
Durable Goods ◽  
Sectoral Linkages

scholarly journals Durable goods, inter-sectoral linkages and monetary policy

2011 ◽  
Vol 35 (5) ◽  
pp. 730-745 ◽  
Author(s):  
Hafedh Bouakez ◽  
Emanuela Cardia ◽  
Francisco J. Ruge-Murcia
Keyword(s):  
Monetary Policy ◽  
Durable Goods ◽  
Sectoral Linkages

scholarly journals Sticky-Price Models and Durable Goods

2007 ◽  
Vol 97 (3) ◽  
pp. 984-998 ◽  
Author(s):  
Robert B Barsky ◽  
Christopher L House ◽  
Miles S Kimball
Keyword(s):  
Monetary Policy ◽  
Durable Goods ◽  
Sticky Prices ◽  
Price Rigidity ◽  
Aggregate Output ◽  
Limiting Case

The inclusion of a durable goods sector in sticky-price models has strong and unexpected implications. Even if most prices are flexible, a small durable goods sector with sticky prices may be sufficient to make aggregate output react to monetary policy as though most prices were sticky. In contrast, flexibly priced durables with sufficiently long service lives can undo the implications of standard sticky price models. In a limiting case, flexibly priced durables cause monetary policy to have no effect on aggregate output. Our analysis suggests that durable goods prices are the most relevant data for calibrating price rigidity. (JEL E21, E23, E31, E52)

scholarly journals Optimal Monetary Policy with Durable and Non-Durable Goods

2002 ◽  
Vol 2002 (0748r) ◽  
pp. 1-31 ◽  
Author(s):  
Christopher J. Erceg ◽  
◽  
Andrew Levin
Keyword(s):  
Monetary Policy ◽  
Durable Goods ◽  
Optimal Monetary Policy

scholarly journals Financial frictions and durable goods in DSGE models with sticky prices

2021 ◽  
Author(s):  
Ugochi Emenogu
Keyword(s):  
Monetary Policy ◽  
Durable Goods ◽  
Financial Frictions ◽  
House Prices ◽  
Sticky Prices ◽  
Dsge Models ◽  
Monetary Policy Shocks ◽  
Policy Shocks ◽  
Policy Measures ◽  
Prudential Policy

The focus of this dissertation is to study the role of financial frictions in DSGE models with durable goods and sticky prices, and how key economic variables respond in such an environment to monetary policy shocks. The first chapter studies the empirical evidence regarding the response of durable and non-durable goods to monetary policy shocks. Using quarterly data from Canada and the United States, and a vector autoregressive (VAR) model, we trace out empirically the effects of monetary policy innovations on key macroeconomic variables. We find that in response to an increase in the interest rate, durable consumption, non-durable consumption, output, and household debt decrease, and the nominal interest rate rises. In the second chapter, we show that in the presence of agency costs and equity based borrowing, the two sector sticky price model with collateral frictions resolve the co-movement problem in a way which is consistent with the empirical evidence, even when durable prices are nearly exible. In the third chapter, we examine the effect of financial frictions on the consumption of durables and non-durables in a two-sector DSGE model with sticky prices and heterogeneous agents. The financial frictions are a combination of loan-to-value (LTV) and payment-to-income (PTI) constraints faced by borrowers. In this setting a monetary contraction reduces the maximum amount that consumer that consumers can borrow in order to purchase durable goods. As a result, the model predicts that the consumption of durables falls, along with non-durables even when durable prices are fully flexible. Thus, the model matches better the predictions of the model with the data, relative to the existing literature. The fourth chapter of the dissertation studies the effectiveness of macro-prudential policy measures in curbing house price inflation amid rising outward foreign direct investment from abroad. To assess the usefulness of these macro-prudential policy tools, we use database of housing prices, GDP, bank crises, policy rates, Chinese outward investment and macro-prudential policy measures covering advanced countries at quarterly frequency from 2003 to 2016. The results suggest that Macro prudential policy measures help in reducing house prices and OFDI has a significant and positive correlation with house prices movements.

A NOTE ON THE POLICY IMPLICATIONS OF USING DIVISIA CONSUMPTION AND MONETARY AGGREGATES

2007 ◽  
Vol 12 (1) ◽  
pp. 132-149 ◽  
Author(s):  
LEIGH DRAKE ◽  
ADRIAN R. FLEISSIG
Keyword(s):  
Monetary Policy ◽  
Durable Goods ◽  
Transmission Mechanism ◽  
Policy Implications ◽  
Monetary Transmission ◽  
Monetary Aggregates ◽  
Monetary Transmission Mechanism ◽  
Consumption Goods ◽  
Monetary Assets ◽  
Insight Into

Using U.K. data that are consistent with utility maximizing behavior by consumers, we construct aggregates for both consumption goods (nondurables and services) and monetary assets that are consistent with economic aggregation theory. Using these aggregates and the stock of durable goods, we estimate the elasticities of substitution between various consumption goods and monetary assets. These estimates are compared to the corresponding results from conventional monetary and consumption aggregates. The results give important information for monetary policy and the monetary transmission mechanism. In particular, these substitution estimates provide insight into the recent changes in expenditure on durable goods. We also show that the use of conventional U.K. consumption and monetary aggregates often give incorrect estimates of substitution and can provide misleading policy insights.

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