The sticky-price model of aggregate fluctuations implies that countries with high trend inflation rates should exhibit less-persistent output fluctuations than countries with low trend inflation. I conduct a cross-country analysis of output persistence and inflation that takes into account the within-country time variation in trend inflation. The results suggest that...
Using aggregate and bank level data for several countries, the paper studies what happens to the banking system in the aftermath of a banking crisis. Contemporary crises are not accompanied by declines in aggregate bank deposits, and credit does not fall relative to output, although the growth of both deposits...
The paper examines the effects of exchange rate fluctuations on real output and the price level in a sample of 33 developing countries. The theoretical model decomposes movements in the exchange rate into anticipated and unanticipated components. Unanticipated currency fluctuations help to determine aggregate demand through exports, imports, and the...
The report demonstrates how capital account and trade account liberalizations help reduce inefficiencies associated with the fluctuations in the output gap, relative to the inefficiencies associated with the fluctuations in inflation. With capital account liberalization the representative household is able to smooth fluctuations in consumption, and thus becomes relatively insensitive...
The paper reveals that the stochastic discount factor seems volatile, but is this observation of any consequence for aggregate analysis of consumption, capital accumulation, output, etc. This paper outlines the standard frictionless model of aggregate consumption and capital accumulation with time-varying subjective probability adjustments, and obtains four implications for aggregate...
The links between employment, productivity and output growth discussed in this paper are central to the overarching theme of poverty reduction and productivity in the ILO World Employment Report 2004. Where poverty persists, it invariably does so because societies fail to deal effectively with unemployment, low productivity and income inequality....
From the executive summary: ‘After a contracting monetary policy shock, aggregate output decreases over time. The evidence seems robust to different ways of identifying monetary policy shocks. The delayed response of output to monetary policy is, also, central in the analysis by most monetary economists at central banks and academics....
The orthodox approach to modeling the Fed's response to economic conditions is to employ a monetary policy reaction function. Most reaction functions are estimated by regressing a policy indicator, possibly the federal funds rate or a monetary aggregate, on variables that describe the state of the economy, such as unemployment,...
Traditionally forecasts of macroeconomic aggregates are extracted from prospective qualitative survey data by relating official data on the aggregate to both the proportion of survey respondents who are "Optimists" and the proportion who are "Pessimists". But there is no reason to focus on these proportions to the exclusion of other...
The authors examine the relative importance of the growth of physical and human capital and the growth of total factor productivity TFP using newly organized data on 145 countries that span more than one hundred years for twenty-four of these countries. For all countries, only 3 percent of average output...
This paper explores the connection between money, banks, and aggregate credit. It starts with a simple "real" model without money, where banks make loans repayable in goods and depositors hold claims on the bank payable on demand in goods. Aggregate production may be delayed in the economy. The paper further...
Plant turnover increases aggregate productivity when efficient producers are more likely to survive. Given high entry and exit rates and the potential importance of net entry in accounting for aggregate productivity, in this paper we examine the determinants of plant exits and then examine how exits and other forms of...
As I understand it, we are interested in "productivity" because we are interested in understanding... the forces that affect "output" because we hope, ultimately, to be able to affect them for the better. We approach this task first by trying to take into account the "obvious" factors: changes in labor...
The output gap is an expression of total resource utilisation in the economy, and can be used as an indicator of domestic inflationary pressures. The output gap is defined as the difference between the actual output level in the economy and the level that is consistent with stable inflation over...
As 1991 Began, the U.S. economy was in the second quarter of a downturn in aggregate economic activity. Real output, as measured by the gross national product real GNP, had fallen in the fourth quarter of 1990 at a 2.5 percent annual rate; the fi ...
Growth to remain buoyant in 2006H1 * Triad output rose by an impressive 8.4% in 2005, slightly better than the 7.6% rise we anticipated in November. This was thanks to a buoyant Q4 in the US, where output rose by 14.6% y-o-y, and also due to solid output growth in...
This paper studies the effects of credit market imperfections on output, the average size and distribution of firms and the level of financial intermediation of the economy. It builds a dynamic general equilibrium model with heterogeneous agents. Households choose whether to become workers or entrepreneurs depending on their own productivity...
The idea that information frictions amplify business cycles is hard to evaluate be-cause information is not easily measured. We propose a quantifiable information friction that amplifies output fluctuations. In our simple model of decentralized trade, income dispersion measures uncertainty about buyer characteristics. Counter-cyclical income dispersion makes the asymmetric information friction...
1. Introduction Since the seminal work by Nelson and Plosser (1982), researchers have paid considerable attention to the presence of stochastic trends in macroeconomic variables. That work also changed the way macroeconomists think about secular trends and short-run fluctuations in business cycles. Since the existence of a unit root...
LONDON AFP — Britain's manufacturing industries experienced an unexpected drop in output in August, the first time since January 2002 that output has fallen for three months in a row. Manufacturing output dropped by 0.8 percent in August from July, the National Statistics office said Wednesday. Analysts had expected...
