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Chain of Production as a Monetary Propagation Mechanism Author info | Abstract | Publisher info | Download info | Related research | Statistics Kevin X. D. Huang () (Utah State University)
Zheng Liu () (Clark University and CREFE )
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This paper studies a general equilibrium model with multiple stages of production and sticky prices. Working through the input-output relations among industries at different stages and the timing of firms' pricing decisions, the model generates persistent fluctuations in both the inflation rate and aggregate output following a monetary shock. The persistence is larger, the greater the number of production stages. With a sufficient number of stages, the real persistence is arbitrarily large.
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Paper provided by CREFE, Université du Québec à Montréal in its series Cahiers de recherche CREFE / CREFE Working Papers with number
106.
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Length: 31 pages
Date of creation: Jun 1999Date of revision:
Publication status: published in Journal of Monetary Economics, 48(2), pp. 437-462, October 2001.Handle: RePEc:cre:crefwp:106Contact details of provider: Postal: P.O. Box 8888, Downtown Station, Montreal (Canada) Quebec, H3C 3P8 Phone: (514) 987-6181 Fax: (514) 987-8494 Email: Web page: http://ideas.uqam.ca/CREFE/ More information through EDIRC
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Keywords: Chain of Production ; Persistence ; Monetary Policy ; Other versions of this item:
Find related papers by JEL classification: E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
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Kevin X. D. Huang & Zheng Liu, 2000.
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