Události

Čt 26.01.2017

Roman Šustek, Ph.D. (Qeen Mary U. of London) “Nominal Rigidities in Debt and Product Markets”

Roman Šustek, Ph.D.

Queen Mary University of London, United Kingdom

Authors: Carlos Garriga, Finn E. Kydland and Roman Šustek

Abstract: Standard models used for monetary policy analysis rely on sticky prices. Recently, the literature started to explore also nominal debt contracts. Focusing on mortgages, this paper compares the two channels of transmission within a common framework. The sticky price channel is dominant when shocks to the policy interest rate are temporary, the mortgage channel is important when the shocks are persistent. The first channel has significant aggregate effects but small redistributive effects. The opposite holds for the second channel. Using yield curve data decomposed into temporary and persistent components, the redistributive and aggregate consequences are found to be quantitatively comparable.

Full Text:  “Nominal Rigidities in Debt and Product Markets”