Monetary Policy Rules, Real Rigidity and Endogenous Persistence
AbstractThe bulk of literature on real rigidity attempts to identify sources of real rigidity in market imperfections while assuming that the money supply is exogenously set. This paper shows that monetary policy preferences affect the responsiveness of marginal cost to output and through this channel they are shown to determine (i) the degree of real rigidity and (ii) the degree of endogenous persistence. We find that substantial levels of real rigidity and persistence can be generated using plausible parameters values, without relying on market imperfections or other sources of real rigidity.
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Bibliographic InfoPaper provided by Economics and Finance Section, School of Social Sciences, Brunel University in its series Economics and Finance Discussion Papers with number 02-31.
Length: 25 pages
Date of creation: Nov 2003
Date of revision:
Contact details of provider:
Postal: Brunel University, Uxbridge, Middlesex UB8 3PH, UK
Other versions of this item:
- G J Bratsiotis & C Martin, 2003. "Monetary Policy Rules, Real Rigidity and Endogenous Persistence," Centre for Growth and Business Cycle Research Discussion Paper Series 24, Economics, The Univeristy of Manchester.
- George J. Bratsiotis & Christopher Martin, 2003. "Monetary Policy Rules, Real Rigidity and Endogenous Persistence," Public Policy Discussion Papers 02-31, Economics and Finance Section, School of Social Sciences, Brunel University.
- G J Bratsiotis & C Martin, 2002. "Monetary Policy Rules, Real Rigidity and Endogenous Persistence," The School of Economics Discussion Paper Series 0221, Economics, The University of Manchester.
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- NEP-CBA-2004-08-09 (Central Banking)
- NEP-MAC-2004-08-09 (Macroeconomics)
- NEP-MON-2004-08-09 (Monetary Economics)
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- Ronny Mazzocchi, 2013. "Scope and Flaws of the New Neoclassical Synthesis," DEM Discussion Papers 2013/13, Department of Economics and Management.
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