Optimal Monetary Impulse-Response Functions in a Matching Model
AbstractThe effects on ex ante optima of a lag in seeing monetary realizations are studied using a matching model of money. The main new ingredient in the model is meetings in which producers have more information than consumers. A consequence is that increases in the amount of money that occur with small enough probability can have negative impact effects on output, because it is optimal to shut down trade in such low probability meetings rather than have lower output when high probability realizations occur. The information lag also produces prices that do not respond much to current monetary realizations.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 7425.
Date of creation: Nov 1999
Date of revision:
Publication status: published as “Output and Price Level Effects of Monetary Uncertainty in a Matching Model,” (with Brett Katzman and Neil Wallace), Journal of Economic Theory, 108(2), February 2003, 217-255.
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Other versions of this item:
- Brett Katzman & John Kennan & Neil Wallace, 1999. "Optimal monetary impulse-response functions in a matching model," Working Papers 595, Federal Reserve Bank of Minneapolis.
- E30 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - General (includes Measurement and Data)
- E40 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-1999-12-08 (All new papers)
- NEP-DGE-1999-12-08 (Dynamic General Equilibrium)
- NEP-MON-1999-12-08 (Monetary Economics)
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