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Are uncertainty shocks aggregate demand shocks?

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Are uncertainty shocks aggregate demand shocks? / Fasani, S.; Rossi, L.
In: Economics Letters, Vol. 167, 30.06.2018, p. 142-146.

Research output: Contribution to Journal/Magazine › Journal article › peer-review

Harvard

Fasani, S & Rossi, L 2018, 'Are uncertainty shocks aggregate demand shocks?', Economics Letters, vol. 167, pp. 142-146. https://doi.org/10.1016/j.econlet.2018.03.029

APA

Fasani, S., & Rossi, L. (2018). Are uncertainty shocks aggregate demand shocks? Economics Letters, 167, 142-146. https://doi.org/10.1016/j.econlet.2018.03.029

Vancouver

Fasani S, Rossi L. Are uncertainty shocks aggregate demand shocks? Economics Letters. 2018 Jun 30;167:142-146. Epub 2018 Mar 31. doi: 10.1016/j.econlet.2018.03.029

Author

Fasani, S. ; Rossi, L. / Are uncertainty shocks aggregate demand shocks?. In: Economics Letters. 2018 ; Vol. 167. pp. 142-146.

Bibtex

@article{80c9f3eb56f443e190f53ef86be266e5,
title = "Are uncertainty shocks aggregate demand shocks?",
abstract = "This note considers the Leduc and Liu (JME, 2016) model and studies the effects of their uncertainty shock under different Taylor-type rules. It shows that both the responses of real and nominal variables highly depend on the Taylor rule considered. Remarkably, inflation reacts positively so that uncertainty shocks look more like negative supply shocks, once an empirically plausible degree of interest rate smoothing is taken into account. This result is reinforced with less reactive monetary rules. Overall, these rules alleviate the recession. ",
keywords = "DSGE model, Inflation dynamics, Search and matching frictions, Taylor rules, Uncertainty shocks",
author = "S. Fasani and L. Rossi",
year = "2018",
month = jun,
day = "30",
doi = "10.1016/j.econlet.2018.03.029",
language = "English",
volume = "167",
pages = "142--146",
journal = "Economics Letters",
issn = "0165-1765",
publisher = "Elsevier",

}

RIS

TY - JOUR

T1 - Are uncertainty shocks aggregate demand shocks?

AU - Fasani, S.

AU - Rossi, L.

PY - 2018/6/30

Y1 - 2018/6/30

N2 - This note considers the Leduc and Liu (JME, 2016) model and studies the effects of their uncertainty shock under different Taylor-type rules. It shows that both the responses of real and nominal variables highly depend on the Taylor rule considered. Remarkably, inflation reacts positively so that uncertainty shocks look more like negative supply shocks, once an empirically plausible degree of interest rate smoothing is taken into account. This result is reinforced with less reactive monetary rules. Overall, these rules alleviate the recession.

AB - This note considers the Leduc and Liu (JME, 2016) model and studies the effects of their uncertainty shock under different Taylor-type rules. It shows that both the responses of real and nominal variables highly depend on the Taylor rule considered. Remarkably, inflation reacts positively so that uncertainty shocks look more like negative supply shocks, once an empirically plausible degree of interest rate smoothing is taken into account. This result is reinforced with less reactive monetary rules. Overall, these rules alleviate the recession.

KW - DSGE model

KW - Inflation dynamics

KW - Search and matching frictions

KW - Taylor rules

KW - Uncertainty shocks

U2 - 10.1016/j.econlet.2018.03.029

DO - 10.1016/j.econlet.2018.03.029

M3 - Journal article

VL - 167

SP - 142

EP - 146

JO - Economics Letters

JF - Economics Letters

SN - 0165-1765

ER -