This paper investigates the evolution of monetary policy in the U.S. using a standard set of macroeconomic variables. Many recent papers have addressed the issue of whether the monetary transmission mechanism has changed (e.g. due to the Fed taking a more aggressive stance against in‡ation) or whether apparent changes are simply due to changes in the volatility of exogenous shocks. A subsidiary...

We study the e¤ects of progressive labor income taxation in an otherwise standard NK model. We show that progressive taxation (i) introduces a trade-o¤ between output and in‡ation stabilization and a¤ects the slope of the Phillips Curve; (ii) acts as automatic stabilizer changing the responses to technology shocks and demand shocks (iii) alters the prescription for the optimal monetary policy. ...

abstract in present paper has tried to examine and investigate quality of effectiveness of monetary shocks on the growth of agricultural sector by using time series dataes of iran economy during 1960-2006 , filter hodric-prescott method and liner regressive models. the resultes show that qualily of effectiveness monetary shocks on growth of agricultural sector is asymmetric and length of effect...

The recent global financial crisis once again revealed the harmful effects of interest-based contracts in the conventional financial system. Islamic finance, as an alternative financial system, discourages interest rate and debt financing. This paper investigates the effects of two financial systems, namely the conventional and Islamic systems, on macroeconomic variables. To achieve this goal, ...

This paper examines the role of habit persistence in consumption in explaining persistent responses of inflation and output to money growth shocks. A monetary stochastic dynamic general equilibrium (DGE) model with a money-in-the-utility-function (MIU-) setup is augmented by habit formation in consumption and evaluated for both Taylor and Calvo price staggering. It is shown that in the benchmar...

We develop and estimate a dynamic stochastic general equilibrium model that features sticky prices, a variable elasticity of demand facing firms and firm-specific labor. While reconciling to a good extent the micro and macro evidence on the behavior of prices, the model offers an accurate account of the dramatic increase in macroeconomic stability from the Great Inflation (1948:I-1979:II) to th...

This paper examines a tractable real business cycle model with idiosyncratic productivity shocks and binding credit constraints on entrepreneurs. The model shows how firm volatility increases in combination with credit market development. It further generates the observed comovement of credit and firm volatility with output at business cycle frequencies in response to aggregate productivity sho...

In this paper, we analyze how lack of credibility and transparency of monetary and fiscal policies undermines the effectiveness of macroeconomic policies to isolate the economy from commodity price fluctuations. We develop a general equilibrium model for a commodity exporting economy where macro policies are conducted through rules. We show that the responses of output, aggregate demand, and in...