Add to ORKGThis paper provides a quantitative answer to the ‘sectoral comovement puzzle’. We extend the two-sector New Keynesian model with flexible durable good prices and sticky non-durable good prices by (i) labour search and matching frictions and (ii) internal habit formation in non-durable consumption. Search and matching frictions generate comovement and increase the persistence of sectoral outputs, whereas habit formation helps to appropriately distribute the impact of a given shock over the two sectors. As a result, our estimated model closely replicates the amplitude and the curvature of the empirical impulse responses in both sectors.Durable production; labour market frictions; sectoral comovement; monetary polic
While they are widely used for policy, two sector New Keynesian models with flexibly priced dur...
Barsky, House and Kimball (2007) show that introducing durable goods into a sticky-price model leads...
This paper shows that goods-market frictions drastically change the dynamics of the labor market, br...
The standard two-sector monetary business cycle model suffers from an important deficiency. Since du...
The standard two-sector monetary business cycle model suffers from an important deficiency. Since du...
The standard two-sector monetary business cycle model suffers from an important deficiency. Since dura...
The standard two-sector monetary business cycle model suffers from an important deficiency. Since dura...
According to Monacelli (2009), a standard New-Keynesian model augmented with credit frictions solves...
According to Monacelli (2009), a standard New-Keynesian model augmented with credit frictions solves...
The standard two-sector monetary business cycle model suffers from an important deficiency. Since dura...
Durable goods pose a challenge for standard sticky-price models because the near constancy of their ...
We study the normative implications of a New Keynesian model featuring in-tersectoral trade of inter...
Barsky, House and Kimball (2007) show that introducing durable goods into a sticky-price model leads...
A standard two-sector sticky price model with flexibly priced durables depicts negative co-movement ...
Barsky, House and Kimball (2007) show that introducing durable goods into a sticky-price model leads...
While they are widely used for policy, two sector New Keynesian models with flexibly priced dur...
Barsky, House and Kimball (2007) show that introducing durable goods into a sticky-price model leads...
This paper shows that goods-market frictions drastically change the dynamics of the labor market, br...
The standard two-sector monetary business cycle model suffers from an important deficiency. Since du...
The standard two-sector monetary business cycle model suffers from an important deficiency. Since du...
The standard two-sector monetary business cycle model suffers from an important deficiency. Since dura...
The standard two-sector monetary business cycle model suffers from an important deficiency. Since dura...
According to Monacelli (2009), a standard New-Keynesian model augmented with credit frictions solves...
According to Monacelli (2009), a standard New-Keynesian model augmented with credit frictions solves...
The standard two-sector monetary business cycle model suffers from an important deficiency. Since dura...
Durable goods pose a challenge for standard sticky-price models because the near constancy of their ...
We study the normative implications of a New Keynesian model featuring in-tersectoral trade of inter...
Barsky, House and Kimball (2007) show that introducing durable goods into a sticky-price model leads...
A standard two-sector sticky price model with flexibly priced durables depicts negative co-movement ...
Barsky, House and Kimball (2007) show that introducing durable goods into a sticky-price model leads...
While they are widely used for policy, two sector New Keynesian models with flexibly priced dur...
Barsky, House and Kimball (2007) show that introducing durable goods into a sticky-price model leads...
This paper shows that goods-market frictions drastically change the dynamics of the labor market, br...