Monetary Economics.

• Position: Program and Working Group Meetings - National Bureau of Economic Research

NBER's Program on Monetary Economics met at the Federal Reserve Bank of New York on April 13. NBER researchers Marc P. Giannoni of Columbia Business School and Kenneth D. West of the University of Wisconsin organized this program:

Anil K Kashyap, University of Chicago and NBER, and Francois Gourio, Boston University, "Investment Spikes: New Facts and a General Equilibrium Exploration"

Discussant: Nobuhiro Kiyotaki, Princeton University and NBER

Christina D. Romer and David H. Romer, University of California, Berkeley and NBER, "The Macroeconomic Effects of Tax Changes: Estimates Based on a New Measure of Fiscal Shocks"

Discussant: Francesco Giavazzi, MIT and NBER

Ariel Burstein, University of California, Los Angeles and NBER, and Christian Hellwig, University of California, Los Angeles, "Prices and Market Shares in a Menu Cost Model"

Discussant: Mikhail Golosov, MIT and NBER

James D. Hamilton, University of California, San Diego and NBER, "Daily Monetary Policy Shocks and the Delayed Response of New Home Sales"

Discussant: John H. Cochrane, University of Chicago and NBER

Glenn D. Rudebusch and John C. Williams, Federal Reserve Bank of San Francisco, "Revealing the Secrets of the Temple: The Value of Publishing Central Bank Interest Rate Projections" Discussant: William English, Federal Reserve Board

Stefano Eusepi, Federal Reserve Bank of New York, and Bruce Preston, Columbia University, "Central Bank Communication and Expectations Stabilization"

Discussant: Christopher A. Sims, Princeton University and NBER

Using plant-level data from Chile and the United States, Kashyap and Gourio show that investment spikes are highly pro-cyclical, so much so that changes in the number of establishments undergoing investment spikes (the "extensive margin") account for the bulk of variation in aggregate investment. The number of establishments undergoing investment spikes also has independent predictive power for aggregate investment, even controlling for past investment and sales. The authors re-calibrate the Thomas (2002) model (that includes fixed costs of investing) so that it assigns a prominent role to extensive adjustment. The recalibrated model has different properties than the standard RBC model for some shocks.

Romer and Romer investigate the impact of changes in the level of taxation on economic activity. They use the narrative record--presidential speeches, executive-branch documents, and Congressional reports--to identify the size, timing...