WorldCat Identities

Kehoe, Patrick J.

Works: 266 works in 1,038 publications in 1 language and 5,634 library holdings
Roles: Author, Editor, Honoree, htt
Classifications: HB1, 330
Publication Timeline
Most widely held works by Patrick J Kehoe
Modeling North American economic integration by Patrick J Kehoe( Book )

13 editions published between 1995 and 1996 in English and Undetermined and held by 208 WorldCat member 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 )

26 editions published between 2003 and 2006 in English and held by 146 WorldCat member 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
Can sticky price models generate volatile and persistent real exchange rates? by V. V Chari( Book )

21 editions published between 2000 and 2002 in English and held by 143 WorldCat member libraries worldwide

The central puzzle in international business cycles is that real exchange rates are volatile and persistent. The most popular story for real exchange rate fluctuations is that they are generated by monetary shocks interacting with sticky goods prices. We quantify this story and find that it can account for some of the observed properties of real exchange rates. When prices are held fixed for at least one year, risk aversion is high and preferences are separable in leisure, the model generates real exchange rates that are as volatile as in the data. The model also generates real exchange rates that are persistent, but less so than in the data. If monetary shocks are correlated across countries, then the comovements in aggregates across countries are broadly consistent with those in the data. Making asset markets incomplete or introducing sticky wages does not measurably change the results
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 137 WorldCat member 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
Optimal fiscal and monetary policy by V. V Chari( Book )

23 editions published between 1998 and 1999 in English and held by 135 WorldCat member libraries worldwide

We provide an introduction to optimal fiscal and monetary policy using the primal approach to optimal taxation. We use this approach to address how fiscal and monetary policy should be set over the long run and over the business cycle. We find four substantive lessons for policymaking: Capital income taxes should be high initially and then roughly zero; tax rates on labor and consumption should be roughly constant; state-contingent taxes on assets should be used to provide insurance against adverse shocks; and monetary policy should be conducted so as to keep nominal interest rates close to zero. We begin optimal taxation in a static context. We then develop a general framework to analyze optimal fiscal policy. Finally, we analyze optimal monetary policy in three commonly used models of money: a cash-credit economy, a money-in-the-utility-function economy
The optimal degree of discretion in monetary policy by Susan Athey( Book )

25 editions published between 2002 and 2004 in English and held by 132 WorldCat member 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
Competitive equilibria with limited enforcement by Patrick J Kehoe( Book )

19 editions published between 2002 and 2003 in English and held by 130 WorldCat member 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
The advantage of transparent instruments of monetary policy by Andrew Atkeson( )

17 editions published in 2001 in English and held by 129 WorldCat member libraries worldwide

Monetary policy instruments differ in their tightness-how closely they are linked to inflation-and their transparency-how easily the public can monitor them. Tightness is always desirable in a monetary policy instrument. When is transparency desirable? We show it is desirable when a government cannot commit to follow a given monetary policy. We apply our argument to a classic question in international economics: Is the exchange rate or the money growth rate the better instrument of monetary policy? We show that if the two instruments are equally tight and a government cannot commit to a policy, then the greater transparency of the exchange rate gives it an advantage as a monetary policy instrument.--Federal Reserve Bank of Minneapolis web site
Money and interest rates with endogeneously segmented markets by Fernando Alvarez( Book )

16 editions published in 1999 in English and held by 126 WorldCat member 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
Money, interest rates, and exchange rates with endogenously segmented asset markets by Fernando Alvarez( Book )

18 editions published in 2000 in English and held by 124 WorldCat member 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
The poverty of nations : a quantitative exploration by V. V Chari( Book )

16 editions published in 1996 in English and held by 122 WorldCat member 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
International business cycles with endogenous incomplete markets by Patrick J Kehoe( Book )

18 editions published in 2000 in English and held by 121 WorldCat member libraries worldwide

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
Monetary shocks and real exchange rates in sticky price models of international business cycles by V. V Chari( Book )

14 editions published in 1997 in English and held by 113 WorldCat member libraries worldwide

The data show large and persistent deviations of real exchange rates from purchasing power parity. Recent work has shown that to a large extent these movements are driven by deviations from the law of one price for traded goods. In the data, real and nominal exchange rates are about 6 times as volatile as relative price levels and they both are highly persistent, with serial correlations of 0.85 and 0.83, respectively. This paper develops a sticky price model with price discriminating monopolists, which produces deviations from the law of one price for traded goods. Our benchmark model, which has prices set for one quarter at a time and a unit consumption elasticity of money demand, does not come close to reproducing these observations. A model which has producers setting prices for 6 quarters at a time and a consumption elasticity of money demand of 0.27 does much better. In it real and nominal exchange rates are about 3 times as volatile as relative price levels and exchange rates are persistent, with serial correlations of 0.65 and 0.66, respectively
Relative price movements in dynamic general equilibrium models of international trade by David Backus( )

16 editions published in 1992 in English and held by 112 WorldCat member libraries worldwide

We examine the behavior of international relative prices from the perspective of dynamic general equilibrium theory, with particular emphasis on the variability of the terms of trade and the relation between the terms of trade and net exports. We highlight aspects of the theory that are critical in determining these properties, contrast our perspective with those associated with the Marshall-Lerner condition and the Harberger-Laursen-Metzler effect, and point out features of the data that have proved difficult to explain within existing dynamic general equilibrium models
Financial crises as herds : overturning the critiques by V. V Chari( Book )

14 editions published in 2003 in English and held by 111 WorldCat member libraries worldwide

Abstract: Financial crises are widely argued to be due to herd behavior. Yet recently developed models of herd behavior have been subjected to two critiques which seem to make them inapplicable to financial crises. Herds disappear from these models if two of their unappealing assumptions are modified: if their zero-one investment decisions are made continuous and if their investors are allowed to trade assets with market-determined prices. However, both critiques are overturned--herds reappear in these models--once another of their unappealing assumptions is modified: if, instead of moving in a prespecified order, investors can move whenever they choose
Industry evolution and transition : a neoclassical benchmark by Andrew Atkeson( Book )

11 editions published in 1997 in English and held by 110 WorldCat member libraries worldwide

Recently, a large number of countries have undertaken major reforms that have led to a large increase in the number of new enterprises. After these reforms, however, it has taken a number of years before output and productivity have begun to grow. The thesis of this paper is that the process of starting new enterprises is turbulent and time-consuming and as a result, it takes time before the benefits of reform show up in increases in measured output and productivity. To establish a neoclassical benchmark for reforming economies, we ask what the path of transition looks like in a reforming economy for which the process governing the growth of new enterprises looks like it does in the U.S., a well-functioning market economy. We find that it takes 5-7 years until measured output and productivity begin to grow rapidly following reform. This finding suggests that, even if all other aspects of the economy are perfect, the transition following economy-wide reforms should take a substantial amount of time
Optimality of the Friedman rule in economies with distorting taxes by V. V Chari( Book )

15 editions published in 1993 in English and held by 110 WorldCat member libraries worldwide

We find conditions for the Friedman rule to be optimal in three standard models of money. These conditions are homotheticity and separability assumptions on preferences similar to those in the public finance literature on optimal uniform commodity taxation. We show that there is no connection between our results and the result in the standard public finance literature that intermediate goods should not be taxed
Dynamics of the trade balance and the terms of trade : the S-curve by David Backus( )

18 editions published between 1992 and 1993 in English and held by 107 WorldCat member libraries worldwide

We provide a theoretical interpretation of two features of international data: the countercyclical movements in net exports and the tendency for the trade balance to be negatively correlated with current and future movements in the terms of trade, but positively correlated with past movements. We document these same properties in a two-country stochastic growth model in which trade fluctuations reflect, in large part, the dynamics of capital formation. We find that the general equilibrium perspective is essential: The relation between the trade balance and the terms of trade depends critically on the source of fluctuations
Measuring organization capital by Andrew Atkeson( )

13 editions published in 2002 in English and held by 105 WorldCat member libraries worldwide

In the manufacturing sector of the U.S. economy, nearly 9% of output is not accounted for as payments to either physical capital or labor. The value of this output is a little larger than the value of the stock of physical capital. We build a model to measure how much of this output can be attributed to payments to organization capital-organization-specific knowledge that is built up with experience. We find that roughly 4% of output can be accounted for as payments to organization capital and that this capital has roughly two-thirds the value of the stock of physical capital
International business cycles : theory and evidence by David Backus( )

15 editions published between 1991 and 1993 in English and held by 105 WorldCat member 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
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Audience level: 0.69 (from 0.66 for Dynamics o ... to 0.71 for The optima ...)

Associated Subjects
Accounting and price fluctuations Balance of trade--Econometric models Balance of trade--Mathematical models Business cycles Business cycles--Econometric models Business cycles--Mathematical models Commercial policy--Econometric models Credit Credit--Econometric models Debts, External Economic development--Econometric models Economic forecasting--Econometric models Equilibrium (Economics) Equilibrium (Economics)--Econometric models Financial crises--Mathematical models Fiscal policy--Econometric models Foreign exchange rates--Econometric models Foreign exchange rates--Mathematical models Free trade--Econometric models Human capital--Mathematical models Income distribution--Econometric models Industrial management Industrial policy--Mathematical models Industrial productivity Inflation (Finance)--Mathematical models Interest rates--Econometric models International economic integration--Econometric models International trade Investments, Foreign--Taxation Investments--Econometric models Investments--Mathematical models Liquidity (Economics)--Econometric models Loans, Foreign--Econometric models Market segmentation--Econometric models Monetary policy--Econometric models Monetary policy--Mathematical models Money market--Econometric models Money supply--Econometric models New business enterprises--Mathematical models North America North American Free Trade Agreement (1992 December 17) Organizational learning Prices--Econometric models Prices--Mathematical models Taxation--Econometric models Taxation--Mathematical models Technological innovations--Mathematical models Terms of trade--Econometric models Terms of trade--Mathematical models United States
Modeling North American economic integration
Alternative Names
Kehoe, P. J.

Kehoe, Patrick

Kehoe, Patrick James

Patrick J. Kehoe econoom

English (354)