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- W2076133057 abstract "Both real and monetary macro models have parallely exploited the potential for various preferences in accounting for empirical facts. This paper brings the two literatures together by estimating time non-separable preferences with habit formation in consumption that nests several commonly used preferences. In the absence of wealth effects and external habits, these preferences fail to generate observed inflation inertia and output persistence after a monetary policy shock. Furthermore, the data strongly rejects these preferences in favor of preferences with external habits. An alternative solution is to include habit adjusted intermediate wealth effect preferences which are able to simultaneously generate sluggish responses of the variables to a monetary policy shock and fit the data better." @default.
- W2076133057 created "2016-06-24" @default.
- W2076133057 creator A5026489185 @default.
- W2076133057 date "2014-01-01" @default.
- W2076133057 modified "2023-09-26" @default.
- W2076133057 title "Evaluating monetary policy under preferences with zero wealth effect: A Bayesian approach" @default.
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- W2076133057 doi "https://doi.org/10.1016/j.jedc.2013.10.003" @default.
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