Please use this identifier to cite or link to this item:
http://dspace.mediu.edu.my:8181/xmlui/handle/10261/1935| Title: | Endogenous capacity utilization and the asymmetric effects of monetary policy |
| Keywords: | Capacity Constraints Limited Participation Idiosyncratic Demand Uncertainty Endogenous Mark-Up |
| Description: | This paper investigates the role of variable capacity utilization as a source of asymmetries in the relationship between monetary policy and economic activity within a dynamic stochastic general equilibrium framework. The source of the asymmetry is directly linked to the bottlenecks and stock-outs that emerge from the existence of capacity constraints in the real side of the economy. Money has real effects due to the presence of rigidities in households' portfolio decisions in the form of a Luces-Fuerst 'limited participation' constraint. The model features variable capacity utilization rates across firms due to demand uncertainty. A monopolistic competitive structure provides additional effects through optimal mark-up changes. The overall message of this paper for monetary policy is that the same actions may have different effects depending on the capacity utilization rate of the economy. Financial support from the Ministerio de Educación y Cultura is gratefully acknowledged. |
| URI: | http://dspace.mediu.edu.my:8181/xmlui/handle/10261/1935 |
| Other Identifiers: | http://hdl.handle.net/10261/1935 |
| Appears in Collections: | Digital Csic |
Files in This Item:
There are no files associated with this item.
Items in DSpace are protected by copyright, with all rights reserved, unless otherwise indicated.