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Technology Shocks and Monetary Policy in an Estimated Sticky Price Model of the US Economy

Listed author(s):
  • Avouyi-Dovi, S.
  • Matheron, J.

In this paper, we, seek to characterize the dynamic effects of permanent technology shocks and the way in which US monetary authorities reacted to these shocks over the sample 1955(1)--2002(4). To do so, we develop an augmented sticky price-sticky wage model of the business cycle, which is estimated by minimizing the distance between theoretical, dynamic responses of key variables to a permanent technology shock and their structural VAR counterparts. In a second step, we compare these responses with the outcome of the optimal monetary policy.

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File URL: https://publications.banque-france.fr/sites/default/files/medias/documents/working-paper_123_2005.pdf
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Paper provided by Banque de France in its series Working papers with number 123.

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Length: 55 pages
Date of creation: 2005
Handle: RePEc:bfr:banfra:123
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Banque de France 31 Rue Croix des Petits Champs LABOLOG - 49-1404 75049 PARIS

Web page: http://www.banque-france.fr/

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