NBER monetary economists meet.

PositionNational Bureau of Economic Research

Nearly 50 members and guests of the NBER's Program on Monetary Economics, directed by N. Gregory Mankiw of NBER and Harvard University, met in Cambridge on November 14 to discuss the following papers:

Lawrence Christiano and Martin s. Eichenbaum, NBER and Northwestern University, and Charles Evans, Federal Reserve Bank of Chicago, "Modeling Money"

Discussant: Eric Leeper, Indiana University Valerie Ramey, NBER and University of California, San Diego, and Matthew D. Shapiro, NBER and University of Michigan, "Costly Capital Reallocation and the Effects of Government Spending"

Discussant: Marianne Baxter, NBER and University of Virginia

Frederic S. Mishkin, NBER and Columbia University, and Adam Posen, Institute for International Economics, "Inflation Targeting: Lessons from Four Countries" (NBER Working Paper No. 6126)

Discussant: Anna J. Schwartz, NBER Michael Woodford, NBEr and Princeton University, "Doing Without Money: Controlling Inflation in a Post-Monetary World"

Discussant: William Dupor, University of Pennsylvania

Casey Mulligan, NBER and University of Chicago, and Xavier Sala-I-Martin, NBER and Columbia University, "Extensive Margins and the Demand for Money"

Discussant: John Shea, NBER and University of Maryland.

Christiano, Eichenbaum, and Evans develop and implement a strategy for assessing the plausibility of monetary business cycle models which focuses on a model's ability to reproduce empirical estimates of actual economies' responses to monetary policy shocks. based on their results with M1, they argue that models in which monetary non-neutralities only reflect the effects of unanticipated movements in money will fail this test. But their limited participation model of money does not fail this test.

Changes in government spending often lead to significant shifts in demand across sectors. Ramey and Shapiro estimate the effects of military buildups on a variety of macroeconomic variables using a new measure of military shocks. The behavior of macroeconomic aggregates is consistent with the predictions of a multi-sector neoclassical model. In particular, consumption, real product wages and manufacturing productivity fall in response to exogenous military buildups in the post-World War II United States.

In recent years, a number of central banks have announced numerical inflation targets as the basis for their monetary strategies. After outlining the reasons why such strategies might be adopted in the pursuit of price stability...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT