Asymmetric effects of aggregate demand: An empirical test of a menu-cost model

Authors
Demery, D Duck, NW
Citation
D. Demery et Nw. Duck, Asymmetric effects of aggregate demand: An empirical test of a menu-cost model, J MACROECON, 22(1), 2000, pp. 29-51
Citations number
22
Categorie Soggetti
Economics
Journal title
JOURNAL OF MACROECONOMICS
ISSN journal
01640704 → ACNP
Volume
22
Issue
1
Year of publication
2000
Pages
29 - 51
Database
ISI
SICI code
0164-0704(200024)22:1<29:AEOADA>2.0.ZU;2-1
Abstract
We present a version of Ball and Mankiw's (1994) menu-cost macroeconomic mo del modified to allow for long-term growth and some elementary dynamics whi le preserving its characteristic predictions: that nominal demand shocks ha ve non-linear and asymmetric output effects in inflationary economies. Test s using U.K. quarterly private sector data over the period 1955 to 1994 gen erally support the model's predictions.