Rule‐of‐Thumb Consumers, Productivity, and Hours*

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Rule-of-thumb consumers, productivity and hours Terms of use: Documents in November 2007The Working Papers of Danmarks Nationalbank describe research and development, often still ongoing, as a contribution to the professional debate.The viewpoints and conclusions stated are the responsibility of the individual contributors, and do not necessarily reflect the views of Danmarks Nationalbank.As a general rule, Working Papers are not translated, but are available in the original language used by the contributor.Danmarks Nationalbank's Working Papers are published in PDF format at www.nationalbanken.dk. A free electronic subscription is also available at this Web site.The subscriber receives an e-mail notification whenever a new Working Paper is published. Resumé I dette papir undersøger vi transmissionsmekanismen af produktivitetsstød i en model med tommelfingerregelforbrugere. I litteraturen er denne finansielle friktion kun blevet undersøgt i relation til finanspolitiske stød. Vi viser, at tilstedevaerelsen af tommelfingerregelforbrugere også hjaelper med at forklare nylige empiriske resultater om produktivitetsstød. Tommelfingerregelforbrugere, sammen med nominelle og reale rigiditeter, er vigtige for at reproducere den negative reaktion af arbejdstimer og de forsinkede reaktioner af produktion og forbrug efter et produktivitetsstød. AbstractIn this paper we study the transmission mechanism of productivity shocks in a model with rule-of-thumb consumers. In the literature, this financial friction has been studied only with reference to fiscal shocks. We show that the presence of rule-of-thumb consumers is also very helpful in accounting for recent empirical evidence on productivity shocks. Rule-of-thumb agents, together with nominal and real rigidities, play an important role in reproducing the negative response of hours and the delayed responses of output and consumption after a productivity shockRule-of-thumb consumers, productivity and hours * Francesco Furlanetto † Norges BankMartin Seneca ‡ University of Aarhus and Danmarks Nationalbank November 2007Abstract In this paper we study the transmission mechanism of productivity shocks in a model with rule-of-thumb consumers. In the literature, this financial friction has been studied only with reference to fiscal shocks. We show that the presence of rule-of-thumb consumers is also very helpful in accounting for recent empirical evidence on productivity shocks. Rule-of-thumb agents, together with nominal and...

Limited Asset Market Participation: Does it Really Matter for Monetary Policy?

“…3 In a similar framework, Furlanetto and Seneca (2007) concentrate their analysis on the dynamics of hours worked in response to a productivity shocks. 4 Di Bartolomeo et al (2010) estimate a NK model with external habits in consumption and LAMP for the G7 countries.…”

Consumption Externalities and Monetary Policy With Limited Asset Market Participation

“…Hence, having ACE and LAMP is clearly crucial to generate a positive response of hours worked to a TFP shock. Contrary to Furlanetto and Seneca (2012), in our setting the expansion of aggregate consumption as a byproduct of the technology shock is not curbed by rule of thumb consumers, but rather enhanced. To this end, nesting the externality in the preferences is crucial because, without this assumption, our numerical exercise shows that the response of total hours worked to a technological innovation would be negative as in the standard NK model.…”

“…The opposite behavior of hours with respect to a technology shock is put forth in Francis and Ramey (2005) in a model with adjustment cost in investment and internal habits. Also in NK models with LAMP and without firm specific capital, a positive technology innovation generates a declines in total labor input as in Furlanetto and Seneca (2012). Hence, having ACE and LAMP is clearly crucial to generate a positive response of hours worked to a TFP shock.…”

“…We find that both aggregate hours worked and real wage increase in our model. Contrary to Furlanetto and Seneca (2012), in our setting the expansion of aggregate consumption as a byproduct of the technology shock is not curbed by rule of thumb consumers, but rather enhanced. Also in NK models with LAMP and without firm specific capital, a positive technology innovation generates a declines in total labor input as in Furlanetto and Seneca (2012).…”

Transferência de renda como modelo de crescimento econômico

“…encontrada nos principais trabalhos desse tipo de literatura (Boscá et al, 2010;Galí et al, 2007;Itawa, 2009;Coenen e Straub, 2004;Furlanetto, 2007;Dallari, 2012;Mayer, Moyen e Stahler, 2010;Stahler e Thomas, 2011;Swarbrick, 2012;Motta e Tirelli, 2010;Díaz, 2012;Colciago, 2011;Mayer e Stahler, 2009;e Forni, Monteforte e Sessa, 2009). …”