Sticky-Price Models and Durable Goods

摘要

Much of our understanding of sticky-price theories comes from models that abstract from capital, investment, and durable goods. However, recent papers that focus on the quantitative performance of sticky-price models have explicitly included purchases of durables as an important element, either in the form of productive capital or in the form of consumer durables. The addition of a durable goods sector is a critical extension of the earlier models, both because of the prominent role that investment plays in the conventional understanding of monetary policy and because, empirically, the production of long-lived durable goods (most notably housing) appears to be very sensitive to changes in monetary policy. In contrast, there are only small changes in the production of nondurables.