Persistence of shocks in an experimental macroeconomy

C.N. Noussair, D. Pfajfar, J. Zsiros

Research output: Chapter in Book/Report/Conference proceedingChapterScientificpeer-review

Abstract

We design experimental economies based on a New Keynesian Dynamic Stochastic General Equilibrium (DSGE) model. We apply shocks to tastes, productivity, and interest rate policy, and measure the persistence of these shocks. We find that, in a setting where goods are perfect substitutes, there is little persistence of output shocks compared to treatments with monopolistic competition, which perform similarly irrespective of whether or not menu costs are present. Discretionary central banking is associated with greater persistence than automated instrumental rules.
Original languageEnglish
Title of host publicationExperiments in Macroeconomics
EditorsJ. Duffy
PublisherEmerald Group Publishing Ltd.
Pages71-108
Volume17
ISBN (Print)9781784411954
Publication statusPublished - 14 Nov 2014

Publication series

NameResearch in Experimental Economics
Volume17
ISSN (Print)978178441

Fingerprint

Macroeconomy
Persistence
Productivity rate
Menu costs
Dynamic stochastic general equilibrium model
Substitute
Monopolistic competition
Experimental design
New Keynesian
Central banking
Interest rate policy

Cite this

Noussair, C. N., Pfajfar, D., & Zsiros, J. (2014). Persistence of shocks in an experimental macroeconomy. In J. Duffy (Ed.), Experiments in Macroeconomics (Vol. 17, pp. 71-108). (Research in Experimental Economics; Vol. 17). Emerald Group Publishing Ltd..
Noussair, C.N. ; Pfajfar, D. ; Zsiros, J. / Persistence of shocks in an experimental macroeconomy. Experiments in Macroeconomics. editor / J. Duffy. Vol. 17 Emerald Group Publishing Ltd., 2014. pp. 71-108 (Research in Experimental Economics).
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Noussair, CN, Pfajfar, D & Zsiros, J 2014, Persistence of shocks in an experimental macroeconomy. in J Duffy (ed.), Experiments in Macroeconomics. vol. 17, Research in Experimental Economics, vol. 17, Emerald Group Publishing Ltd., pp. 71-108.

Persistence of shocks in an experimental macroeconomy. / Noussair, C.N.; Pfajfar, D.; Zsiros, J.

Experiments in Macroeconomics. ed. / J. Duffy. Vol. 17 Emerald Group Publishing Ltd., 2014. p. 71-108 (Research in Experimental Economics; Vol. 17).

Research output: Chapter in Book/Report/Conference proceedingChapterScientificpeer-review

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Noussair CN, Pfajfar D, Zsiros J. Persistence of shocks in an experimental macroeconomy. In Duffy J, editor, Experiments in Macroeconomics. Vol. 17. Emerald Group Publishing Ltd. 2014. p. 71-108. (Research in Experimental Economics).