Monetary History 1914 to 1941 notes
An Abbreviated Monetary History, 1914-1941
Friedman and Schwartz have probably made the most
influential case for the view that nominal factors have real
effects. Now, a brief review of their evidence.
The Fed coi
Endogenous Money notes
King and Plosser's Model of Endogenous Money.
Early stages of RBC had no explanation for observed realmonetary correlation. K-P argue that this can be handled by
thinking of monetary services as a intermediate good that is
Does RBC Make Sense notes
Does RBC Make Sense?
Even sophisticated RBC models of monetary policy like K-P
have a lot of trouble fitting the basic facts. Aside from the
impact of money growth on nominal interest rates, money
simply doesn't matter for the
Fiscal Policy in Real Models notes
Fiscal Policy in Real Models (Barro 1981; Aschauer 1988)
There is no theoretical difficulty in explaining how fiscal policy
affects output in real models. But the mechanism is not the
traditional Keynesian one.
Liquidity Effect Theory and Evidence notes
The Liquidity Effect: Theory and Evidence
In real model, one-time monetary expansions have no impact
on nominal interest rates; changes in the rate of monetary
growth raise nominal rates on a 1:1 basis.
Fiscal Policy with Nominal Rigidities notes
Fiscal Policy in Models with Nominal Rigidities
Empirical confirmation of the link between fiscal policy and
real output is much sparser. Many take WWII as conclusive
proof, but monetary policy was expansiona
Three Versions of RBC notes
Three Versions of RBC
Since RBC seems so intuitively implausible to most people,
we begin by discussing the empirical evidence for three RBC or
RBC-like business cycle mechanisms.
Mechanism #1: Supply shocks. (Hamilton 19
Monetary Policy with Nominal Rigidities notes
Monetary Policy in Models with Nominal Rigidities
Diverse sources confirm the real effects of monetary policy,
including both narrative studies (Boschen and Mills, Friedman
and Schwartz), and a wealth of ec
RBC Unemployment Theory notes
RBC and the Theory of Unemployment
What does "market-clearing" even mean for labor markets?
Presumably it doesn't mean that zero labor is devoted to
searching for better job matches.
This makes search theory a natural c
ADP Model Interpretation notes
The ADP Model and Its Interpretation
ADP model just drops RE and appeals to large body of
evidence that workers do react worse to nominal cuts than real
Does this make sense in terms of my rational irrationality