TY  - JOUR
AU  - Ireland,Peter N.
TI  - Technology Shocks in the New Keynesian Model
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 10309
PY  - 2004
Y2  - February 2004
UR  - http://www.nber.org/papers/w10309
L1  - http://www.nber.org/papers/w10309.pdf
N1  - Author contact info:
Peter N. Ireland
Boston College
Department of Economics
140 Commonwealth Ave.
Chestnut Hill, MA 02467-3859
Tel: 617/552-3687
Fax: 617/552-2308
E-Mail: irelandp@bc.edu
AB  - In the New Keynesian model, preference, cost-push, and monetary shocks all compete with the real business cycle model's technology shock in driving aggregate fluctuations. A version of this model, estimated via maximum likelihood, points to these other shocks as being more important for explaining the behavior of output, inflation, and interest rates in the postwar United States data. These results weaken the links between the current generation of New Keynesian models and the real business cycle models from which they were originally derived. They also suggest that Federal Reserve officials have often faced difficult trade-offs in conducting monetary policy.
ER  -