Series: IMF Working Papers
Author(s): Pau Rabanal
Publisher: INTERNATIONAL MONETARY FUND
Publication Date: 01 July 2003
Keywords: Price Puzzle, New Keynesian Models, Bayesian Methods, nominal interest rate, central bank, monetary economics, Bayesian Analysis, Simulation Methods, Price-Puzzle,
This paper estimates the importance of the cost channel of monetary policy in a New Keynesian model of the business cycle. A model with nominal rigidities is extended by assuming that a fraction of firms need to bo...