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Working Paper
Sticky prices, money, and business fluctuations
Can nominal contracts create monetary nonneutrality if they arise endogenously in general equilibrium? Yes, if (1) agents have complete information about the money stock and (2) shocks to the system are purely redistributive and private information, precluding conventional insurance markets. Without contracts, money is neutral toward aggregate quantities. However, risk-sharing between suppliers and demanders creates an incentive for both parties to use nominal contracts. in particular, if an increase in the money growth rate signals a rise in the dispersion of shocks to demanders' wealth, ...
Working Paper
The new neoclassical synthesis and the role of monetary policy
Macroeconomics is moving toward a New Neoclassical Synthesis, which like the synthesis of the 1960s melds Classical with Keynesian ideas. This paper describes the key features of the new synthesis and its implications for the role of monetary policy. We find that the New Neoclassical Synthesis rationalizes an activist monetary policy which is a simple system of inflation targets. Under this "neutral" monetary policy, real quantities evolve as suggested in the literature on real business cycles. Going beyond broad principles, we use the new synthesis to address several operational aspects of ...
Working Paper
Testing long run neutrality
Conference Paper
Money and business cycles
Journal Article
The new IS-LM model : language, logic, and limits
Conference Paper
Inflation targeting in a St. Louis model of the 21st century
Working Paper
Stochastic trends and economic fluctuations
Journal Article
Quantitative theory and econometrics