TY  - JOUR
AU  - Jeanne,Olivier
TI  - Generating Real Persistent Effects of Monetary Shocks: How Much Nominal Rigidity Do We Really Need?
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 6258
PY  - 1997
Y2  - November 1997
UR  - http://www.nber.org/papers/w6258
L1  - http://www.nber.org/papers/w6258.pdf
N1  - Author contact info:
Olivier Jeanne
Department of Economics
Johns Hopkins University
454 Mergenthaler Hall
3400 N. Charles Street
Baltimore, MD 21218
Tel: 410/516-7604
Fax: 410/516-7600
E-Mail: ojeanne@jhu.edu
AB  - This paper attempts to assess whether money can generate persistent economic" fluctuations in dynamic general equilibrium models of the business cycle. We show that a small" nominal friction in the goods market can make the response of output to monetary shocks large" and persistent if it is amplified by real wage rigidity in the labor market. We also argue that" given the level of real wage rigidity that is observed in developed countries nominal stickiness might be sufficient for money to produce economic fluctuations as persistent" as those observed in the data.
ER  -