Idiosyncratic Shocks, Lumpy Investment and the Monetary Transmission Mechanism

Reiter, MichaelORCID: https://orcid.org/0000-0001-9490-8746; Sveen, Tommy and Weinke, Lutz (2023) Idiosyncratic Shocks, Lumpy Investment and the Monetary Transmission Mechanism. The B.E. Journal of Macroeconomics, 23 (2), pp. 1037-1055. https://doi.org/10.1515/bejm-2022-0129

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Abstract

Standard (S, s) models of lumpy investment allow us to match many aspects of the micro data, but it is well known that the implied interest rate sensitivity of investment is unrealistically large. In fact, the micro-level lumpiness in investment puts empirical discipline on the modeling of investment decisions, and this makes it hard to explain the monetary policy transmission mechanism.

Item Type: Article in Academic Journal
Keywords: lumpy investment, monetary policy, sticky prices
Classification Codes (e.g. JEL): E22, E31, E32
Research Units: Current Research Groups > Macroeconomics and Business Cycles
Date Deposited: 05 Dec 2023 12:18
Last Modified: 05 Dec 2023 12:18
DOI: 10.1515/bejm-2022-0129
ISSN: 1935-1690
URI: https://irihs.ihs.ac.at/id/eprint/6791

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