Several empirical studies suggest that exchange rate pass-through has declined in recent years in industrialized countries.
Staff Working Papers
In a recent paper, Chang, Gomes, and Schorfheide (2002) extend the standard real business cycle (RBC) model to allow for a learning-by-doing (LBD) mechanism whereby current labour supply affects future productivity.
Recent empirical evidence suggests that private consumption is crowded-in by government spending. This outcome violates existing macroeconomic theory, according to which the negative wealth effect brought about by a rise in public expenditure should decrease consumption.
Real Exchange Rate Persistence in Dynamic General-Equilibrium Sticky-Price Models: An Analytical CharacterizationThis paper assesses analytically the ability of dynamic general-equilibrium sticky-price models to generate persistent real exchange rate fluctuations. It develops a tractable general-equilibrium model with Calvo-type price stickiness.
This paper studies the persistent effects of monetary shocks on output. Previous empirical literature documents this persistence, but standard general-equilibrium models with sticky prices fail to generate output responses beyond the duration of nominal contracts.
This paper develops and estimates a dynamic general-equilibrium sticky-price model that accounts for real exchange rate persistence.