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Title: |
Asymmetry in Economic Fluctuations in the US Economy: The Pre-war and the 1946-1991 Periods
Compared |
| Author: |
Kandil, Magda |
| Author
Affiliation: |
IMF |
| Source: |
International Economic Journal, Spring 2002, v. 16, no. 1, pp. 21-42 |
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Publication Date: |
Spring 2002 |
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Abstract: |
The focus of this investigation is on the
asymmetric effects of monetary growth shocks in the pre- and post-war
periods of United States history. The downward rigidity of nominal wages
in the post-war period appears to be an important factor in
differentiating the slope of the aggregate supply curve over time.
Accordingly, the response of real output and price to expansionary
monetary growth shocks is similar in the pre- and post-war periods. In
contrast, the aggregate supply curve is flatter in the face of negative
monetary growth shocks in the post-war period, exacerbating output
contraction and moderating price deflation. The apparent change in the
asymmetric effects of monetary growth shocks has determined economic
performance in the United States over time. |
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