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Kehoe, Patrick J.

Works: 138 works in 922 publications in 2 languages and 4,543 library holdings
Genres: History 
Roles: Author, Editor, Honoree
Classifications: HB1, 382.917
Publication Timeline
Publications about Patrick J Kehoe
Publications by Patrick J Kehoe
Most widely held works by Patrick J Kehoe
Monetary shocks and real exchange rates in sticky price models of international business cycles by V. V Chari( Book )
55 editions published between 1996 and 2002 in English and Undetermined and held by 208 libraries worldwide
"The central puzzle in international business cycles is that fluctuations in real exchange rates are volatile and persistent. We quantify the popular story for real exchange rate fluctuations: they are generated by monetary shocks interacting with sticky goods prices. If prices are held fixed for at least one year, risk aversion is high, and preferences are separable in leisure, then real exchange rates generated by the model are as volatile as in the data and quite persistent, but less so than in the data. The main discrepancy between the model and the data, the consumption--real exchange rate anomaly, is that the model generates a high correlation between real exchange rates and the ratio of consumption across countries, while the data show no clear pattern between these variables."--Federal Reserve Bank of Minneapolis web site
Modeling North American economic integration by Patrick J Kehoe( Book )
13 editions published between 1995 and 1996 in English and Undetermined and held by 162 libraries worldwide
Modeling North American Economic Integration presents descriptions of the models and the central results obtained by four teams of economic modelers who analyze the impact of the North American Free Trade Agreement (NAFTA) on the economies of Canada, Mexico and the USA. Preliminary versions of these four modeling efforts were presented at a conference with the same title as the book, held in March 1991 at the Federal Reserve Bank of Minneapolis and sponsored by El Colegio de Mexico and the Institute for Empirical Macroeconomics. The book also includes a Foreword by Jaime Serra-Puche, the former Secretary of Trade and Industrial Development in Mexico and that country's chief negotiator of NAFTA, plus two essays by the editors. The first provides an overview and discussion of the results obtained by the modeling groups, and the second provides a critical survey of the sort of applied general equilibrium model employed by these groups. A final chapter discusses the results of the models in relation to the 1994-95 financial crisis in Mexico
Business cycle accounting by V. V Chari( Book )
34 editions published between 2003 and 2006 in English and held by 116 libraries worldwide
We propose and demonstrate a simple method for guiding researchers in developing quantitative models of economic fluctuations. We show that a large class of models are equivalent to a prototype growth model with time-varying wedges that resemble time-varying productivity, labor taxes, and capital income taxes. We use data to measure these wedges, called efficiency, labor, and investment wedges, and then feed their measured values back into the model. We assess the fraction of fluctuations in output, employment, and investment accounted for by these wedges during the Great Depression and the 1982 recession. For the Depression, the efficiency and labor wedges together account for essentially all of the fluctuations; investment wedges play no role. For the recession, the efficiency wedge plays the most important role; the other two, minor roles. These results are not sensitive to alternative measures of capital utilization or alternative labor supply elasticities
International business cycles : theory and evidence by David Backus( Book )
27 editions published between 1991 and 1993 in English and Undetermined and held by 104 libraries worldwide
We review recent work comparing properties of international business cycles with those of dynamic general equilibrium models, emphasizing two discrepancies between theory and data that we refer to as anomalies. The first is the consumption/output/productivity anomaly: in the data we generally find that the correlation across countries of output fluctuations is larger than the analogous consumption and productivity correlations. In theoretical economies we find, for a wide range of parameter values, that the consumption correlation exceeds the productivity and output correlations. The second anomaly concerns relative price movements: the standard deviation of the terms of trade is considerably larger in the data than it is in theoretical economies. We speculate on changes in theoretical structure that might bring theory and data closer together
Measuring organization capital by Andrew Atkeson( Book )
27 editions published between 2001 and 2005 in English and Dutch and held by 100 libraries worldwide
"Manufacturing plants have a clear life cycle: they are born small, grow substantially as they age, and eventually die. Economists have long thought that this life cycle is driven by the accumulation of plant-specific knowledge, here called organization capital. Theory suggests that where plants are in the life cycle determines the size of the payments, or dividends, plant owners receive from organization capital. These payments are compensation for the interest cost to plant owners of walting for their plants to grow. We build a quantitative growth model of the life cycle of plants and use it, along with U.S. data, to infer the overall size of these payments. They turn out to be quite large-more than one-third the size of the payments plant owners receive from physical capital, net of new investment, and more than 40% of payments from all forms of intangible capital."--Federal Reserve Bank of Minneapolis web site
Sticky price models of the business cycle : can the contract multiplier solve the persistence problem? by V. V Chari( Book )
27 editions published between 1996 and 1998 in English and held by 93 libraries worldwide
The purpose of this paper is to construct a quantitative equilibrium model with price setting and use it to ask whether staggered price setting can generate persistent output fluctuations following monetary shocks. We construct a business cycle version of a standard sticky price model in which imperfectly competitive firms set nominal prices in a staggered fashion. We assume that prices are exogenously sticky for a short period of time. Persistent output fluctuations require endogenous price stickiness in the sense that firms choose not to change prices very much when they can do so. We find the amount of endogenous stickiness to be small. As a result, we find that such a model cannot generate persistent movements in output following monetary shocks
The optimal degree of discretion in monetary policy by Susan Athey( Book )
32 editions published between 2002 and 2004 in English and held by 89 libraries worldwide
How much discretion should the monetary authority have in setting its policy? This question is analyzed in an economy with an agreed-upon social welfare function that depends on the randomly fluctuating state of the economy. The monetary authority has private information about that state. In the model, well-designed rules trade off society's desire to give the monetary authority discretion to react to its private information against society's need to guard against the time inconsistency problem arising from the temptation to stimulate the economy with unexpected inflation. Although this dynamic mechanism design problem seems complex, society can implement the optimal policy simply by legislating an inflation cap that specifies the highest allowable inflation rate. The more severe the time inconsistency problem, the more tightly the cap constrains policy and the smaller is the degree of discretion. As this problem becomes sufficiently severe, the optimal degree of discretion is none
Money and interest rates with endogeneously segmented markets by Fernando Alvarez( Book )
17 editions published in 1999 in English and held by 82 libraries worldwide
This paper analyses the effects of open market operations on interest rates in a model in which agents must pay a fixed cost to exchange assets and cash. Asset markets are endogenously segmented in that some agents choose to pay the fixed cost and some do not. When the fixed cost is zero, the model reduces to the standard one in which persistent money injections increase interest rates, flatten the yield curve, and lead to a downward-sloping yield curve on average. In contrast sufficiently segmented, then persistent money injections decrease nominal interest rates, steepen or even twist the yield curve, and lead to an upward-sloping yield curve on average
The poverty of nations : a quantitative exploration by V. V Chari( Book )
15 editions published in 1996 in English and held by 80 libraries worldwide
We document regularities in the distribution of relative incomes and patterns of investment in countries and over time. We develop a quantitative version of the neoclassical growth model with a broad measure of capital in which investment decisions are affected by distortions. These distortions follow a stochastic process which is common to all countries. Our model generates a panel of outcomes which we compare to the data. In both the model and the data, there is greater mobility in relative incomes in the middle of the income distribution than at the extremes. The 10 fastest growing countries and the 10 slowest growing countries in the model have growth rates and investment-output ratios similar to those in the data. In both the model and the data, the miracle' countries have nonmonotonic investment-output ratios over time. The main quantitative discrepancy between the model and the data is that there is more persistence in growth rates of relative incomes in the model than in the data
Reputation spillover across relationships : reviving reputation models of debt by Harold Linh Cole( Book )
18 editions published in 1996 in English and held by 78 libraries worldwide
A traditional explanation for why sovereign governments repay debts is that they want to keep good reputations so they can easily borrow more. Bulow and Rogoff show that this argument is invalid under two conditions: (i) there is a single debt relationship, and (ii) regardless of their past actions, governments can earn the (possibly state-contingent) market rate of return by saving abroad. Bulow and Rogoff conjecture that, even under condition (ii), in more general reputation models with multiple relationships and spillover across them, reputation may support debt. This paper shows what is needed for this conjecture to be true
Money, interest rates, and exchange rates with endogenously segmented asset markets by Fernando Alvarez( Book )
20 editions published in 2000 in English and held by 77 libraries worldwide
This paper analyzes the effects of money injections on interest rates and exchange rates in a model in which agents must pay a Baumol-Tobin style fixed cost to exchange bonds and money. Asset markets are endogenously segmented because this fixed cost leads agents to trade bonds and money only infrequently. When the government injects money through an open market operation, only those agents that are currently trading absorb these injections. Through their impact on these agents' consumption, these money injections affect real interest rates and real exchange rates. We show that the model generates the observed negative relation between expected inflation and real interest rates. With moderate amounts of segmentation, the model also generates other observed features of the data: persistent liquidity effects in interest rates and volatile and persistent exchange rates. A standard model with no fixed costs can produce none of these features
International business cycles with endogenous incomplete markets by Patrick J Kehoe( Book )
19 editions published in 2000 in English and held by 74 libraries worldwide
Abstract: Backus, Kehoe and Kydland (1992), Baxter and Crucini (1995) and Stockman and Tesar (1995) find two major discrepancies between standard international business cycle models with complete markets and the data: In the models, cross-country correlations are much higher for consumption than for output, while in the data the opposite is true; and cross-country correlations of employment and investment are negative, while in the data they are positive. This paper introduces a friction into a standard model that helps resolve these anomalies. The friction is that international loans are imperfectly enforceable; any country can renege on its debts and suffer the consequences for future borrowing. To solve for equilibrium in this economy with endogenous incomplete markets, the methods of Marcet and Marimon (1999) are extended. Incorporating the friction helps resolve the anomalies more than does exogenously restricting the assets that can be traded
Competitive equilibria with limited enforcement by Patrick J Kehoe( Book )
19 editions published between 2002 and 2003 in English and held by 73 libraries worldwide
This study demonstrates how constrained efficient allocations can arise endogenously as equilibria in an economy with a limited ability to enforce contracts and with private agents behaving competitively, taking a set of taxes as given. The taxes in this economy limit risk-sharing and arise in an equilibrium of a dynamic game between governments of sovereign nations. The equilibrium allocations depend on governments choosing to tax both the repayment of international debt and the income from capital investment in their countries
Optimal fiscal policy in a business cycle model by V. V Chari( Book )
16 editions published in 1993 in English and held by 72 libraries worldwide
This paper develops the quantitative implications of optimal fiscal policy in a business cycle model. In a stationary equilibrium the ex ante tax rate on capital income is approximately zero. There is an equivalence class of ex post capital income tax rates and bond policies that support a given allocation. Within this class the optimal ex post capital tax rates can range from being close to i.i.d. to being close to a random walk. The tax rate on labor income fluctuates very little and inherits the persistence properties of the exogenous shocks and thus there is no presumption that optimal labor tax rates follow a random walk. The welfare gains from smoothing labor tax rates and making ex ante capital income tax rates zero are small and most of the welfare gains come from an initial period of high taxation on capital income
Time inconsistency and free-riding in a monetary union by V. V Chari( Book )
17 editions published between 2002 and 2008 in English and held by 64 libraries worldwide
We analyze the setting of monetary and nonmonetary policies in monetary unions. We show that in these unions a time inconsistency problem in monetary policy leads to a novel type of free- rider problem in the setting of nonmonetary policies, such as labor market policy, fiscal policy, and bank regulation. The free-rider problem leads the union's members to pursue lax nonmonetary policies that induce the monetary authority to generate high inflation. The free-rider problem can be mitigated by imposing constraints on the nonmonetary policies, like unionwide rules on labor market policy, debt constraints on members' fiscal policy, and unionwide regulation of banks. When there is no time inconsistency problem, there is no free-rider problem, and constraints on nonmonetary policies are unnecessary and possibly harmful
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Associated Subjects
Accounting and price fluctuations Business cycles Business cycles--Econometric models Business cycles--Mathematical models Commercial policy--Econometric models Credit Credit--Econometric models Credit--Mathematical models Debt relief--Econometric models Debts, External Debts, External--Econometric models Economic development--Econometric models Economic forecasting--Econometric models Economic policy--Econometric models Economics Equilibrium (Economics) Equilibrium (Economics)--Econometric models Equilibrium (Economics)--Mathematical models Foreign exchange rates Foreign exchange rates--Econometric models Free trade--Econometric models Income distribution--Econometric models Industrial management Industrial productivity Inflation (Finance) Interest rates--Econometric models International economic integration--Econometric models International economic relations International economic relations--Econometric models International finance International trade Investments, Foreign--Taxation Investments--Econometric models Labor market Liquidity (Economics)--Econometric models Loans, Foreign--Econometric models Market segmentation--Econometric models Monetary policy Monetary policy--Econometric models Monetary unions Monetary unions--Econometric models Money market--Econometric models Money supply--Econometric models North America North American Free Trade Agreement (1992 December 17) Organizational learning Prices Prices--Econometric models Prices--Mathematical models United States
Alternative Names
Kehoe, P. J.
Kehoe, Patrick
English (350)
Dutch (2)
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