TY  - JOUR
AU  - Kimball,Miles S.
TI  - The Quantitative Analytics of the Basic Neomonetarist Model
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 5046
PY  - 1996
Y2  - March 1996
UR  - http://www.nber.org/papers/w5046
L1  - http://www.nber.org/papers/w5046.pdf
N1  - Author contact info:
Miles S. Kimball
Department of Economics
University of Michigan
Ann Arbor, MI  48109-1220
Tel: 734/764-2375
Fax: 734/764-2769
E-Mail: mkimball@umich.edu
AB  - This paper constructs a dynamic macroeconomic model with less- than-perfect price flexibility which has a real side consistent with Real Business Cycle Theory, augmented by investment adjustment costs, increasing returns to scale, and a new, flexible formalization of imperfect competition.  A new mode of approximation is developedþuseful for any model in which one state variable adjusts quickly, while another state variable adjusts slowly.  Even with investment adjustment costs, monetary expansions are found to raise the real interest rate.  The determinants of real rigidity and the macroeconomic rate of price adjustment are investigated.
ER  -