Rodrigues Madeira, Joao Antonio orcid.org/0000-0002-7380-9009 (2015) Firm-specific capital, inflation persistence and the sources of business cycles. European economic review. pp. 229-243. ISSN 0014-2921
Abstract
This paper estimates a firm-specific capital DSGE model. Firm-specific capital improves the fit of DSGE models to the data (as shown by a large increase in the value of the log marginal likelihood). This results from a lower implied estimate of the NKPC slope for a given degree of price stickiness. Firm-specific capital leads to a better fit to the volatilities of macro variables and a greater persistence of inflation. It is also shown that firm-specific capital reduces the dependence of New Keynesian models on price markup shocks and that it increases the persistence of output to monetary shocks.
Metadata
Item Type: | Article |
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Authors/Creators: |
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Copyright, Publisher and Additional Information: | (c) 2014 Elsevier B.V. All rights reserved. This is an author produced version of a paper published in European Economic Review. Uploaded in accordance with the publisher's self-archiving policy. |
Keywords: | New Keynesian models; Sticky prices; DSGE; Business cycles; Firm-specific capital; Bayesian estimation |
Dates: |
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Institution: | The University of York |
Academic Units: | The University of York > Faculty of Social Sciences (York) > Economics and Related Studies (York) |
Depositing User: | Pure (York) |
Date Deposited: | 28 Oct 2015 09:01 |
Last Modified: | 08 Nov 2024 01:17 |
Published Version: | https://doi.org/10.1016/j.euroecorev.2014.12.004 |
Status: | Published |
Refereed: | Yes |
Identification Number: | 10.1016/j.euroecorev.2014.12.004 |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:84037 |