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Macroeconomics Seminar presented by Silvia Miranda-Agrippino (Northwestern)
26 February 2020, 12:30 pm–2:00 pm
When Creativity Strikes: News Shocks and Business Cycle Fluctuations (with Sinem Hacıo˘glu Hoke, Bank of England)
Event Information
Open to
- All
Organiser
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Department of Economics – Department of Economics
Location
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Rm 321, Drayton House30 Gordon StreetLondonWC1H 0AXUnited Kingdom
Abstract: We propose a novel external instrument for the identification of technology news shocks based on patent applications. Technology diffuses slowly, and affects TFP in an S-shaped pattern. Responsible for a tenth of economic fluctuations at business cycle frequencies, the shock elicits a slow, positive response of quantities, and a sluggish contraction of prices followed by an endogenous easing of the monetary stance. The ensuing expansion substantially predates any material increase in TFP. The stock market prices in technology news on impact, but consumer expectations take longer to adjust, consistent with a New-Keynesian framework with nominal rigidities featuring informationally constrained agents.
About the Speaker
Silva Miranda-Agrippino
at Northwestern
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