TY - JOUR
T1 - Lumpy investment and the monetary transmission mechanism
AU - Reiter, Michael
AU - Sveen, Tommy
AU - Weinke, Lutz
PY - 2013/10
Y1 - 2013/10
N2 - The lumpy nature of plant-level investment is generally not taken into account in the context of New Keynesian monetary theory (see, e.g., Christiano et al., 2005; Woodford, 2005). Our main result shows that if this theory is augmented by a standard model of lumpy investment, monetary policy shocks lead to large but very short-lived impacts on output and inflation, in a way that goes against empirical evidence and the consensus view in the literature.
AB - The lumpy nature of plant-level investment is generally not taken into account in the context of New Keynesian monetary theory (see, e.g., Christiano et al., 2005; Woodford, 2005). Our main result shows that if this theory is augmented by a standard model of lumpy investment, monetary policy shocks lead to large but very short-lived impacts on output and inflation, in a way that goes against empirical evidence and the consensus view in the literature.
KW - Lumpy investment
KW - Sticky prices
UR - http://www.scopus.com/inward/record.url?scp=84886445945&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=84886445945&partnerID=8YFLogxK
U2 - 10.1016/j.jmoneco.2013.08.003
DO - 10.1016/j.jmoneco.2013.08.003
M3 - Article
AN - SCOPUS:84886445945
VL - 60
SP - 821
EP - 834
JO - Carnegie-Rochester Confer. Series on Public Policy
JF - Carnegie-Rochester Confer. Series on Public Policy
SN - 0304-3932
IS - 7
ER -