Durable Goods, Inter-Sectoral Linkages and Monetary Policy


  • Cahiers de recherche


  • Barsky, House and Kimball (2007) show that introducing durable goods into a sticky-price model leads to negative sectoral comovement of production following a monetary policy shock and, under certain conditions, to aggregate neutrality. These results appear to undermine sticky-price models. In this paper, we show that these results are not robust to two prominent and realistic features of the data, namely input-output interactions and limited mobility of productive inputs. When extended to allow for both features, the sticky-price model with durable goods delivers implications in line with VAR evidence on the effects of monetary policy shocks.

fecha de publicación

  • 2008

Líneas de investigación

  • Durability
  • Input-Output Interactions
  • Monetary Policy
  • Roundabout Production
  • Sectoral Comovement


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