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Author : Jordi Galí
Release : 2005
Genre :
Kind : eBook
Book Rating : /5 ( reviews)
Book Synopsis Markups, gaps, and the welfare costs of business fluctuations[ by : Jordi Galí
Download or read book Markups, gaps, and the welfare costs of business fluctuations[ written by Jordi Galí. This book was released on 2005. Available in PDF, EPUB and Kindle. Book excerpt:
Author :
Release : 2002
Genre :
Kind : eBook
Book Rating : /5 ( reviews)
Book Synopsis Markups, Gaps, and the Welfare Costs of Business Fluctuations by :
Download or read book Markups, Gaps, and the Welfare Costs of Business Fluctuations written by . This book was released on 2002. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Jordi Galí
Release : 2002
Genre : Business cycles
Kind : eBook
Book Rating : /5 ( reviews)
Book Synopsis Markups, Gaps, and the Welfare Costs of Business Fluctuations by : Jordi Galí
Download or read book Markups, Gaps, and the Welfare Costs of Business Fluctuations written by Jordi Galí. This book was released on 2002. Available in PDF, EPUB and Kindle. Book excerpt: In this paper we present a simple, theory-based measure of the variations in aggregate economic efficiency associated with business fluctuations. We decompose this indicator, which we refer to as 'the gap', into two constituent parts: a price markup and a wage markup, and show that the latter accounts for the bulk of the fluctuations in our gap measure. Finally, we derive a measure of the welfare costs of business cycles that is directly related to our gap variable, and which takes into account explicitly the existence of a varying aggregate inefficiency. When applied to postwar U.S. data, for plausible parametrizations, our measure suggests welfare losses of fluctuations that are of a higher order of magnitude than those derived by Lucas (1987). It also suggests that the major postwar recessions involved substantial efficiency costs.
Author : Ms.Valerie Cerra
Release : 2020-05-29
Genre : Business & Economics
Kind : eBook
Book Rating : 990/5 ( reviews)
Book Synopsis Hysteresis and Business Cycles by : Ms.Valerie Cerra
Download or read book Hysteresis and Business Cycles written by Ms.Valerie Cerra. This book was released on 2020-05-29. Available in PDF, EPUB and Kindle. Book excerpt: Traditionally, economic growth and business cycles have been treated independently. However, the dependence of GDP levels on its history of shocks, what economists refer to as “hysteresis,” argues for unifying the analysis of growth and cycles. In this paper, we review the recent empirical and theoretical literature that motivate this paradigm shift. The renewed interest in hysteresis has been sparked by the persistence of the Global Financial Crisis and fears of a slow recovery from the Covid-19 crisis. The findings of the recent literature have far-reaching conceptual and policy implications. In recessions, monetary and fiscal policies need to be more active to avoid the permanent scars of a downturn. And in good times, running a high-pressure economy could have permanent positive effects.
Author : Davide Debortoli
Release : 2017-07-21
Genre : Business & Economics
Kind : eBook
Book Rating : 752/5 ( reviews)
Book Synopsis Designing a Simple Loss Function for Central Banks by : Davide Debortoli
Download or read book Designing a Simple Loss Function for Central Banks written by Davide Debortoli. This book was released on 2017-07-21. Available in PDF, EPUB and Kindle. Book excerpt: Yes, it makes a lot of sense. This paper studies how to design simple loss functions for central banks, as parsimonious approximations to social welfare. We show, both analytically and quantitatively, that simple loss functions should feature a high weight on measures of economic activity, sometimes even larger than the weight on inflation. Two main factors drive our result. First, stabilizing economic activity also stabilizes other welfare relevant variables. Second, the estimated model features mitigated inflation distortions due to a low elasticity of substitution between monopolistic goods and a low interest rate sensitivity of demand. The result holds up in the presence of measurement errors, with large shocks that generate a trade-off between stabilizing inflation and resource utilization, and also when ensuring a low probability of hitting the zero lower bound on interest rates.
