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Technology persistence and monetary policy
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Pancrazi, Roberto and Vukotić, Marija (2013) Technology persistence and monetary policy. Working Paper. Coventry, UK: University of Warwick, Department of Economics. Warwick economics research papers series (TWERPS), Volume 2013 (Number 1013).
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Text (Working paper)
WRAP_twerp_1013_Vukotic.pdf Download (782Kb) | Preview |
Official URL: http://www2.warwick.ac.uk/fac/soc/economics/resear...
Abstract
In this paper, by using several statistical tools, we provide evidence of increased persistence of the U.S. total factor productivity. In a forward-looking model, agentsí
optimal behavior depends on the autocorrelation structure of the exogenous shocks.
Since many monetary models are driven by exogenous technology shocks, we study the implications of a change in technology persistence on monetary policy using a
New Keynesian framework. First, we analytically derive the interaction between the TFP persistence, monetary policy parameters, and output gap and ináation.
Second, we show that change in the TFP persistence a§ects the optimal behavior of monetary policy.
Item Type: | Working or Discussion Paper (Working Paper) | ||||
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Subjects: | H Social Sciences > HB Economic Theory T Technology > T Technology (General) |
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Divisions: | Faculty of Social Sciences > Economics | ||||
Library of Congress Subject Headings (LCSH): | Economics -- Mathematical models , Monetary policy , Monetary policy -- Mathematical models , Technological innovations | ||||
Series Name: | Warwick economics research papers series (TWERPS) | ||||
Publisher: | University of Warwick, Department of Economics | ||||
Place of Publication: | Coventry, UK | ||||
Official Date: | 19 June 2013 | ||||
Dates: |
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Volume: | Volume 2013 | ||||
Number: | Number 1013 | ||||
Number of Pages: | 57 | ||||
Status: | Not Peer Reviewed | ||||
Access rights to Published version: | Open Access (Creative Commons) |
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