Optimal Monetary Impulse-Response Functions in a Matching Model

38 Pages Posted: 6 Mar 2000 Last revised: 17 Apr 2021

See all articles by Brett Katzman

Brett Katzman

University of Miami - School of Business Administration - Department of Economics

John Kennan

University of Wisconsin; National Bureau of Economic Research (NBER)

Neil Wallace

Pennsylvania State University, College of the Liberal Arts - Department of Economic

Date Written: November 1999

Abstract

The effects on ex ante optima of a lag in seeing monetary realizations are studied using a matching model of money. The main new ingredient in the model is meetings in which producers have more information than consumers. A consequence is that increases in the amount of money that occur with small enough probability can have negative impact effects on output, because it is optimal to shut down trade in such low probability meetings rather than have lower output when high probability realizations occur. The information lag also produces prices that do not respond much to current monetary realizations.

Suggested Citation

Katzman, Brett Eric and Kennan, John and Wallace, Neil, Optimal Monetary Impulse-Response Functions in a Matching Model (November 1999). NBER Working Paper No. w7425, Available at SSRN: https://ssrn.com/abstract=203165

Brett Eric Katzman

University of Miami - School of Business Administration - Department of Economics ( email )

P.O. Box 248126
Coral Gables, FL 33124-6550
United States
305-284-1654 (Phone)

HOME PAGE: http://www.bus.miami.edu/~eco/aaa/faculty/List/katzman.htm

John Kennan (Contact Author)

University of Wisconsin ( email )

1180 Observatory Drive
Madison, WI 53706
United States
608-262-5393 (Phone)
608-263-3876 (Fax)

National Bureau of Economic Research (NBER)

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Neil Wallace

Pennsylvania State University, College of the Liberal Arts - Department of Economic ( email )

524 Kern Graduate Building
University Park, PA 16802-3306
United States
814-863-3805 (Phone)
814-863-4775 (Fax)

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