Ball, Laurence, and N. Gregory Mankiw, 1994, “Asymmetric Price Adjustment and Economic Fluctuations.” Economic Journal, Vol. 104 (March), pp. 247–61.
Barro, Robert J., 1977, “Unanticipated Money Growth and Unemployment in the United States,” American Economic Review, Vol. 67 (March), pp. 101–115.
Barro, Robert J., 1978, “Unanticipated Money, Output, and the Price Level in the United States,” Journal of Political Economy. Vol. 86 (August), pp. 549–80.
Caballero, Ricardo J., and Eduardo Engel, 1992, “Price Rigidities, Asymmetries, and Output Fluctuations,” NBER Working Paper No. 4091 (Cambridge, Massachusetts: National Bureau of Economic Research, June).
Caballero, Ricardo J., and Hammour, Mohamad L., 1995, “The Cleansing Effect of Recessions,” American Economic Review, Vol. 84 (December), pp. 1350–68.
Caplin, Andrew, and John Leahy, 1991, “State-Dependent Pricing and the Dynamics of Money and Output,” Quarterly Journal of Economics, Vol. 106 (August), pp. 683–708.
Caplin, Andrew, and John Leahy, 1996, “Monetary Policy as a Process of Search,” American Economic Review, Vol. 86 (September), pp. 689–702.
Cover, James Peery, 1992, “Asymmetric Effects of Positive and Negative Money-Supply Shocks,” Quarterly Journal of Economics, Vol. 107 (November), pp. 1261–82.
Davis, Steven J., and John Haltiwanger, 1990, “Gross Job Creation and Destruction: Microeconomic Evidence and Macroeconomic Implications,” in NBER Macroeconomics Annual 1990 (Cambridge, Massachusetts: MIT Press), pp. 123–68.
Davis, Steven J., and John Haltiwanger, 1992, “Gross Job Creation, Gross Job Destruction and Employment Reallocation,” Quarterly Journal of Economics, Vol. 107 (August), pp. 819–63.
Davis, Steven J., and John Haltiwanger, and Scott Shuh, 1996, Job Creation and Destruction (Cambridge, Massachusetts: MIT Press).
De Long, J. Bradford, and Lawrence H. Summers, 1988, “How Does Macroeconomic Policy Affect Output?” Brookings Papers on Economic Activity: 2, pp. 433–80.
Diamond, Peter A., 1982, “Wage Determination and Efficiency in Search Equilibrium,” Review of Economic Studies, Vol. 49 (April), pp. 217–27.
Jackman, Richard, and John Sutton, 1982, “Imperfect Capital Markets and the Monetarist Black Box: Liquidity Constraints, Inflation and the Asymmetric Effects of Interest Rate Policy,” Economic Journal, Vol. 92 (March), pp. 108–28.
Karras, Georgios, 1996, “Are the Output Effects of Monetary Policy Asymmetric? Evidence from a Sample of European Countries,” Oxford Bulletin of Economics and Statistics, Vol. 58 (May), pp. 267–68.
Millard, Stephen P., and Dale T. Mortensen, 1994, “The Unemployment and Welfare Effects of Labour Market Policy: A Comparison of the U.S. and the U.K.” (unpublished; London, Bank of England).
Mishkin, Frederic S., 1982, “Does Anticipated Policy Matter? An Econometric Investigation,” Journal of Political Economy, Vol. 90 (February), pp. 22–51.
Morgan, Donald P., 1993, “Asymmetric Effects of Monetary Policy,” Federal Reserve Bank of Kansas City Economic Review, Vol. 78, No. 2, pp. 21–33.
Mortensen, Dale T., 1970, “A Theory of Employment and Wage Dynamics,” in Microeconomic Foundations of Employment and Inflation Theory, ed. by Edmund S. Phelps et al. (New York: Norton), pp. 167–211.
Mortensen, Dale T., 1994, “The Cyclical Behaviour of Job and Worker Flows,” Journal of Economic Dynamics and Control, Vol. 18 (November), pp. 1121–42.
Mortensen, Dale T., and Christopher A. Pissarides, 1994, “Job Creation and Job Destruction in the Theory of Unemployment,” Review of Economic Studies, Vol. 61 (July), pp. 397–115.
Pietro Garibaldi is an Economist in the IMF’s Research Department. He holds a Ph.D. from the London School of Economics. He benefited from comments of Alberto Martini, Julian Berengaut, Giuseppe Bertola, John Leahy, Marcello Estevao, Peter Hole, and Jorge Márquez-Ruarte. He is particularly indebted to Humberto Lopez, and thanks seminar participants at the IMF, at the Board of Governors of the Federal Reserve, and at the 1997 European Economic Association Meeting in Toulouse.
The maximum likelihood estimates are very similar but the convergence takes place only with a 1 percent level of tolerance.