We examine the dynamic effects of TFP news shocks in context frictions financial markets. document two new facts. First, a shock to future generates significant decline credit spread indicators along with robust improvement supply indicators. Second, we establish tight link between and that explain majority un-forecastable movements A DSGE model enriched sector Gertler-Kiyotaki-Karadi type very...

We dissect the impact of a large and sudden exchange rate appreciation on Swiss border import prices, retail consumer expenditures domestic imported nondurable goods, following removal EUR/CHF floor in January 2015. Cross-sectional variation price changes by currency invoicing carries over to prices allocations, impacting imports competing as well expenditures. provide measures sensitivity shar...

We develop a random-matching model to study the price dynamics of monies produced privately according time-consuming mining technology. For our leading example, there exists unique equilibrium where value money increases over time and reaches steady state. There is also continuum perfect-foresight equilibria inflates bursts gradually time. Initially, held for speculative motive, but it acquires...

We develop a multisector sticky-price DSGE model that can endogenously deliver differential responses of prices to aggregate and sectoral shocks. Input-output production linkages (standard) monetary policy rule contribute slow response In turn, labor market segmentation at the level induces within-sector strategic substitutability in price-setting decisions, which helps fast sector-specific est...

In this paper we develop the first search-theoretic monetary model of a two-country global economy. We show the connection between deep monetary frictions (i.e. search and matching frictions), capital holdup externalities, and the realization of an endogenous departure from the “excess smoothness” problem in the real exchange rate found in standard models. Using this alternative monetary model,...

We estimate the dynamic stochastic general equilibrium model of Christiano, Eichenbaum, and Evans (2005) on United Kingdom data. Our estimates suggest that price stickiness is a more important source of nominal rigidity in the U.K. than wage stickiness. Our estimates of parameters governing investment behavior are only well behaved when post-1979 observations are included, which reflects govern...