Endogenous capacity utilization and the asymmetric effects of monetary policy


Autoria(s): Álvarez Lois, Pedro Pablo
Contribuinte(s)

Universitat Autònoma de Barcelona. Unitat de Fonaments de l'Anàlisi Econòmica

Institut d'Anàlisi Econòmica

Data(s)

09/05/2006

Resumo

This paper investigates the role of variable capacity utilization as a source of asymmetries in the relationship between monetary policy and economic activity within a dynamic stochastic general equilibrium framework. The source of the asymmetry is directly linked to the bottlenecks and stock-outs that emerge from the existence of capacity constraints in the real side of the economy. Money has real effects due to the presence of rigidities in households' portfolio decisions in the form of a Luces-Fuerst 'limited participation' constraint. The model features variable capacity utilization rates across firms due to demand uncertainty. A monopolistic competitive structure provides additional effects through optimal mark-up changes. The overall message of this paper for monetary policy is that the same actions may have different effects depending on the capacity utilization rate of the economy.

Formato

41

507366 bytes

application/pdf

Identificador

http://hdl.handle.net/2072/1978

Idioma(s)

eng

Relação

Working papers; 469.00

Direitos

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Palavras-Chave #Política monetària -- Models economètrics
Tipo

info:eu-repo/semantics/workingPaper