Paez-Farrell, Juan 2006. Assessing sticky price models using the Burns and Mitchell approach. [Working Paper]. Cardiff Economics Working Papers, Cardiff: Cardiff University. |
Preview |
PDF
- Published Version
Download (105kB) | Preview |
Abstract
This paper evaluates sticky-price models using the methods proposed by Burns and Mitchell, focusing on the monetary aspects of the business cycle. Recent research has emphasised the responses of models to shocks at the expense its systematic component. Whereas sticky-price models have been successful at replicating impulse response functions from VARs, this paper highlights that they are unable to mimic the data for nominal variables. Moreover, the results are robust to the specification of the Phillips curve, including its backward-looking variant; calibrated values and the inclusion of fiscal policy shocks. Since being able to mimic the data is the lowest hurdle a model must pass, these results pose a challenge for New Keynesian-type models.
Item Type: | Monograph (Working Paper) |
---|---|
Date Type: | Publication |
Status: | Published |
Schools: | Business (Including Economics) |
Subjects: | H Social Sciences > HB Economic Theory |
Publisher: | Cardiff University |
Date of First Compliant Deposit: | 30 March 2016 |
Last Modified: | 05 Oct 2015 15:08 |
URI: | https://orca.cardiff.ac.uk/id/eprint/77724 |
Actions (repository staff only)
![]() |
Edit Item |