IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this article

Planning Output Dynamics with Memory

Listed author(s):
  • Caputo Michele
Registered author(s):

    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.

    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:
    Download Restriction: Access to full text is restricted to subscribers

    File URL:
    Download Restriction: no

    As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

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

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

    in new window

    Handle: RePEc:mul:jb33yl:doi:10.1428/29093:y:2009:i:1:p:85-104
    Contact details of provider: Web page:

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

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

    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.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.