Advanced Search
MyIDEAS: Login to save this article or follow this journal

Planning Output Dynamics with Memory

Contents:

Author Info

  • Caputo Michele
Registered author(s):

    Abstract

    We show that, because of the memory, the output after monetary changes follows as a dynamic hump-shaped path similar as that obtained in the structural VAR literature. We study then the variation caused by two consecutive monetary changes with the same sign and amount and compare it with the case of a single change with double amplitude finding that in the short range the effect of the double amplitude is larger while in the long range is true the opposite implying that a sequence of changes with limited amplitude has the advantage of testing the system with smaller risk without compromising the final result. Finally, the case of two step variations of monetary policy with opposite amounts is considered for the circumstance when a first monetary change does not give the desired result and it is needed to go back to the previous monetary condition; we find that their total effects are reversible only asymptotically, but in a relatively short time the total effect may be negligible. The theory may be applied also to the effect generated by shocks other than monetary changes as a sudden economic development or an international crisis. A first tentative test with the reaction of a market to a shock confirms the theory of the paper, however other tests with data fit to the theory would be required.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://www.rivisteweb.it/download/article/10.1428/29093
    Download Restriction: no

    File URL: http://www.rivisteweb.it/doi/10.1428/29093
    Download Restriction: no

    Bibliographic Info

    Article provided by Società editrice il Mulino in its journal Economia politica.

    Volume (Year): (2009)
    Issue (Month): 1 ()
    Pages: 85-104

    as in new window
    Handle: RePEc:mul:jb33yl:doi:10.1428/29093:y:2009:i:1:p:85-104

    Contact details of provider:

    Related research

    Keywords:

    References

    No references listed on IDEAS
    You can help add them by filling out this form.

    Citations

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:mul:jb33yl:doi:10.1428/29093:y:2009:i:1:p:85-104. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.