Heterogeneity In Macroeconomics And Its Implications For Monetary Policy
by Fabian Schnell /
2015 / English / PDF
1.3 MB Download
Fabian Schnell develops a model indicating that by keeping real
interest rates too low, monetary policy can distort the allocation
of resources across firms and potentially delay economic recovery
after a recession. This is a new channel of monetary policy that is
especially relevant in view of “Quantitative Easing” programs. A
second model focuses on the short-term implications of
heterogeneously productive firms, showing an acceleration effect of
technology shocks. Finally, an empirical investigation of firms’
price-setting behaviors shows that time-dependent factors, relative
to state-dependent ones, play a small role with respect to the
probability and the size of a price change. All results provide new
insights for monetary policy.
Fabian Schnell develops a model indicating that by keeping real
interest rates too low, monetary policy can distort the allocation
of resources across firms and potentially delay economic recovery
after a recession. This is a new channel of monetary policy that is
especially relevant in view of “Quantitative Easing” programs. A
second model focuses on the short-term implications of
heterogeneously productive firms, showing an acceleration effect of
technology shocks. Finally, an empirical investigation of firms’
price-setting behaviors shows that time-dependent factors, relative
to state-dependent ones, play a small role with respect to the
probability and the size of a price change. All results provide new
insights for monetary policy.
