Replication data for: Slow Post-financial Crisis Recovery and Monetary Policy
Principal Investigator(s): View help for Principal Investigator(s) Daisuke Ikeda; Takushi Kurozumi
Version: View help for Version V1
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Project Citation:
Ikeda, Daisuke, and Kurozumi, Takushi. Replication data for: Slow Post-financial Crisis Recovery and Monetary Policy. Nashville, TN: American Economic Association [publisher], 2019. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2019-12-07. https://doi.org/10.3886/E116410V1
Project Description
Summary:
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Post-financial crisis recoveries tend to be slow and accompanied by slowdowns in total factor productivity (TFP) and permanent losses in GDP. To prevent them, how should monetary policy be conducted? We address this issue by developing a model with endogenous TFP growth in which an adverse financial shock can induce a slow recovery. In the model, a welfare-maximizing monetary policy rule features a strong response to output, and the welfare gain from output stabilization is much larger than when TFP expands exogenously. Moreover, inflation stabilization results in a sizable welfare loss, while nominal GDP stabilization works well, albeit causing high interest rate volatility.
Scope of Project
JEL Classification:
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E12 General Aggregative Models: Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
E23 Macroeconomics: Production
E32 Business Fluctuations; Cycles
E43 Interest Rates: Determination, Term Structure, and Effects
E44 Financial Markets and the Macroeconomy
E52 Monetary Policy
G01 Financial Crises
E12 General Aggregative Models: Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
E23 Macroeconomics: Production
E32 Business Fluctuations; Cycles
E43 Interest Rates: Determination, Term Structure, and Effects
E44 Financial Markets and the Macroeconomy
E52 Monetary Policy
G01 Financial Crises
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