Skip to main content Skip to main content

Search Results

Results 31 - 36 of 36 for yield curve has inverted signaling

Customer Capital, Markup Cyclicality, and Amplification - Working Paper 2017-033

This paper studies the importance of firm-level price-markup dynamics for business cycle fluctuations. Using state-of-the-art IO techniques to measure the behavior of markups over the business cycle at the firm level, I find that markups are counter-cyclical with an average elasticity of -1.1 with respect to real GDP. Importantly, I find substantial heterogeneity in markup cyclicality across firms, with small firms having significantly more counter-cyclical markups than large firms. Then, I develop a general equilibrium model by embedding customer capital (due to deep habits as in Ravn, Schmitt-Grohe, and Uribe, 2006) into a standard Hopenhayn (1992) model of firm dynamics with entry and exit. The calibrated model replicates these empirical facts and produces counter-cyclical firm sales dispersions consistent with the data. The resulting input misallocation amplifies both the volatility and persistence of the aggregate productivity shocks driving the business cycle.

research.stlouisfed.org/wp/more/2017-033

Customer Capital, Markup Cyclicality, and Amplification - Working Paper 2017-033

This paper studies the importance of firm-level price markup dynamics for business cycle fluctuations. The first part of the paper uses state-of-the-art IO techniques to measure the behavior of markups over the business cycle at the firm level. I find that markups are countercyclical with an average elasticity of -0.9 with respect to real GDP, in line with the earlier industry-level evidence. Importantly, I find substantial heterogeneity in markup cyclicality across firms, with small firms having significantly more countercyclical markups than large firms. In the second part of the paper, I develop a general equilibrium model that matches these empirical findings and explore its implications for business cycle dynamics. In particular, I embed customer capital (due to deep habits as in Ravn, Schmitt-Grohe, and Uribe 2006) into a standard Hopenhayn (1992) model of firm dynamics with entry and exit. A key feature of the model is that a firm's decision about markups becomes dynamic {firms accumulate customer capital in the periods of fast growth by charging low markups, and choose to exploit it by charging high markups in the downturns. In particular, during recessions, the endogenous higher exit probability for smaller firms implies that they place lower weight on future profits, leading them to charge higher markups. This mechanism serves to endogenously increase the dispersion of firm sales and employment in recessions, a property that is consistent with the data. I further show that the resulting input misallocation amplifies both the volatility and persistence of the exogenous productivity shocks driving the business cycle.

research.stlouisfed.org/wp/more/2017-033

Conventional and Unconventional Monetary Policy - Review

The authors extend a standard New Keynesian model to incorporate heterogeneity in spending opportunities and two sources of (potentially time-varying) credit spreads and to allow a role for the central bank’s balance sheet in equilibrium determination.

research.stlouisfed.org/.../review/2010/07/01/conventional-and-unconventional-monetary-policy

Stock Market Booms and Monetary Policy in the Twentieth Century - Review

This article examines the association between stock market booms and monetary policy in the United States and nine other developed countries during the 20th century. 

research.stlouisfed.org/.../03/01/stock-market-booms-and-monetary-policy-in-the-twentieth-century

Complete Issue - Review

Includes proceedings of the Twenty-Eighth Annual Economic Policy Conference of the Federal Reserve Bank of St. Louis, "Inflation Targeting: Prospects and Problems".

research.stlouisfed.org/publications/review/2004/07/01/complete-issue/

House Prices and the Stance of Monetary Policy - Review

This article estimates a Bayesian vector autoregression for the U.S. economy that includes a housing sector and addresses the following questions: Can developments in the housing sector be explained on the basis of developments in real and nominal gross domestic product and interest rates?

research.stlouisfed.org/.../review/2008/07/01/house-prices-and-the-stance-of-monetary-policy

Long-term Unemployment: Attached and Mismatched? - Working Paper 2015-042

In this paper, I quantify the contribution of occupation-specific shocks and skills to unemployment duration and its cyclical dynamics. I quantify specific skills using microdata on wages, estimating occupational switching cost as a function of the occupations'' difference in skills. The productivity shocks are consistent with job finding rates by occupation. For the period 1995-2013, the model captures 69.5% of long-term unemployment in the data, while a uniform finding rate delivers only 47.2%. In the Great Recession, the model predicts 72.9% of the long-term unemployment that existed in the data whereas a uniform finding rate would predict 57.8%.

research.stlouisfed.org/wp/more/2015-042

FILTER YEAR

2007 3 items

2008 2 items

2009 2 items

2019 2 items

1994 1 items

1997 1 items

2001 1 items

2004 1 items

2006 1 items

2010 1 items

2012 1 items

2014 1 items

2017 1 items

2020 1 items

FILTER PUBLICATION

Review 16 items

Page One Economics® 2 items

Economic Synopses 1 items

FILTER COLLECTION

publications 19 items

Working Papers 17 items