F1 - Trade

• Inventories and Real Rigidities in New Keynesian Business Cycle Models

  Staff Working Paper 2009-9 Oleksiy Kryvtsov, Virgiliu Midrigan

  Kryvtsov and Midrigan (2008) study the behavior of inventories in an economy with menu costs, fixed ordering costs and the possibility of stock-outs. This paper extends their analysis to a richer setting that is capable of more closely accounting for the dynamics of the US business cycle.

  Content Type(s): Staff research, Staff working papers Topic(s): Business fluctuations and cycles, Monetary policy transmission JEL Code(s): E, E3, E31, F, F1, F12

• Relative Prices, Trading Gains, and Real GDI: The Case of Canada

  Staff Discussion Paper 2009-4 Yi Zheng

  Treating imports as intermediate inputs to domestic production, the author adopts the translog function approach to model real gross domestic income (GDI) in Canada over the 1961–2006 period. She explores the role of price ratios, such as terms of trade and the real effective exchange rate, in explaining changes in real GDI, trade openness, trade […]

  Content Type(s): Staff research, Staff discussion papers Topic(s): Econometric and statistical methods, Productivity JEL Code(s): C, C4, C43, D, D3, D33, F, F1, F10, O, O4, O47

• Inventories, Markups, and Real Rigidities in Menu Cost Models

  Staff Working Paper 2009-6 Oleksiy Kryvtsov, Virgiliu Midrigan

  Real rigidities that limit the responsiveness of real marginal cost to output are a key ingredient of sticky price models necessary to account for the dynamics of output and inflation. We argue here, in the spirit of Bils and Kahn (2000), that the behavior of marginal cost over the cycle is directly related to that of inventories, data on which is readily available.

  Content Type(s): Staff research, Staff working papers Topic(s): Business fluctuations and cycles, Monetary policy transmission JEL Code(s): E, E3, E31, F, F1, F12