Optimal monetary policy with the cost channel

By Federico Ravenna, C. Walsh. 2006

506 citations recorded by the source corpus.

View Paper: https://www.semanticscholar.org/paper/3cf7f3f21120d502a89c7b86d59b94f8eb8a5353

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In Economics and Econometrics

Citations in the corpus

Monetary policy and exchange rate overshooting: Dornbusch was right after all* (2009, background): “Such a feature has recently been explained by a cost channel of the interest rate, where the increased interest rate increases borrowing costs for firms and therefore prices, and is less of a problem (see Ravenna and Walsh, 2006; Chowdhury et al., 2006).”
The role of house prices in the monetary policy transmission mechanism in small open economies (2010, background): “The puzzle may be explained by a cost channel of the interest rate, where (at least part of) the increase in firms borrowing costs is offset by an increase in prices (Ravenna and Walsh, 2006; Chowdhury et al., 2006).”
The Price Puzzle Revisited: Can the Cost Channel Explain a Rise in Inflation after a Monetary Policy Shock? (2009, methodology): “This feature of the model extends earlier findings by Christiano, Eichenbaum, and Evans (2005) and Ravenna and Walsh (2006), who model the banking industry as a neutral conveyor of monetary shocks.”
Empirical Evidence on Inflation Expectations in the New Keynesian Phillips Curve (2014, background): “Chowdhury, Hoffmann, and Schabert (2006) and Ravenna and Walsh (2006) assume that firms must borrow to pay their wage bill up front each period, which leads to the so-called cost channel of interest rates, i.e., marginal cost is directly influenced by the interest rate.”
Vacancies, Unemployment, and the Phillips Curve (2007, methodology): “Equation (30) imposes the same theoretical restrictions as are required to obtain (35).”
DSGE Models for Monetary Policy Analysis (2010, unknown): “This is becausewith an activeworking capital channel a rise in the interest rate drives up marginal cost.5 5 Equation (35) resembles equation (13) in Ravenna and Walsh (2006), except that we also allow for materials inputs, i.e., g 1.”