Aspects of Household Heterogeneity in New Keynesian Economics
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| Author(s): | Seneca, Martin |
| Subject: | Monetary- and foreign-exchange policy; Monetary policy |
| Type: | PhD Theses |
| Year of publication: | 2008 |
| Date of publication: | 10/10/2008 |
The thesis consists of two parts each divided into two self-containing chapters. Chapter 1 is called Labour market asymmetries in a monetary union and is joint work with Torben M. Andersen. This paper takes a first step in analysing how a monetary union performs in the presence of labour market asymmetries. The title of Chapter 2 is Monetary policy and welfare in a monetary union with labour market heterogeneity. The paper addresses the question of how monetary policy should be conducted in a monetary union when labour market structures are different in member countries. Chapter 3, Rule of thumb consumers, productivity and hours, is joint work with Francesco Furlanetto. In this chapter we study the transmission mechanisms of productivity shocks in a model with rule-of-thumb consumers. In Chapter 4, Fiscal shocks, rule-of-thumb consumers and real rigidities, which is joint work with Francesco Furlanetto, we show that empirically plausible results on the effects of fiscal shocks in Galí et al. (2007) rely on an excessive degree of price stickiness and an implausibly large percentage of financially constrained agents. We show that it is possible to obtain an empirically appealing consumption multiplier for plausible values of these parameters if real rigidities are added to the model.
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