Production chains and general equilibrium aggregate dynamics

• 成果类型: Article
• 署名作者: Huang, KXD; Liu, Z
• 署名单位: Utah System of Higher Education; Utah State University; Emory University
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/S0304-3932(01)00078-2
• 发表日期: 2001
• 页码: 437-462
• 关键词: production chains; staggered price contracts; persistence; monetary policy

摘要

Recent empirical studies reveal that monetary shocks can cause persistent fluctuations in aggregate output. In this paper, we propose a mechanism to help generate such persistence. Our dynamic stochastic general equilibrium model features a vertical input-output structure, with staggered price contracts at each stage of production. Working through the input-output relations and the timing of firms' pricing decisions, the model generates persistent fluctuations in aggregate output and the observed patterns of price dynamics following a monetary shock. Output responses are more persistent, the greater the number of stages of production, and the larger the share of intermediate inputs. With a sufficient number of stages, the persistence is arbitrarily large if the share of intermediate inputs is one at all but finitely many stages. (C) 2001 Elsevier Science B.V. All rights reserved.