scholarly journals Labour Market Frictions, Monetary Policy and Durable Goods

Author(s):  
Federico Di Pace ◽  
Matthias S. Hertweck
2019 ◽  
Vol 32 ◽  
pp. 274-304 ◽  
Author(s):  
Federico Di Pace ◽  
Matthias S. Hertweck

Author(s):  
Hafedh Bouakez ◽  
Emanuela Cardia ◽  
Francisco J. Ruge-Murcia

2007 ◽  
Vol 97 (3) ◽  
pp. 984-998 ◽  
Author(s):  
Robert B Barsky ◽  
Christopher L House ◽  
Miles S Kimball

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)


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