The DOI matches its Crossref record; 2 of the 2 references it cites were found in a registry or an index.
Habit Formation in Consumption and Its Implications for Monetary-Policy Models
Abstract
This paper explores a monetary-policy model with habit formation for consumers, in which consumers' utility depends in part on current consumption relative to past consumption. The empirical tests developed in the paper show that one can reject the hypothesis of no habit formation with tremendous confidence, largely because the habit-formation model captures the gradual hump-shaped response of real spending to various shocks. The paper then embeds the habit-consumption specification in a monetary-policy model and finds that the responses of both spending and inflation to monetary-policy actions are significantly improved by this modification. (JEL D12, E52, E43)
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Cites
Discretion versus policy rules in practice
Taylor, J. B. (1993) · Carnegie-Rochester Conference Series on Public Policy · doi:10.1016/0167-2231(93)90009-l · Cited by 9,065
By Force of Habit: A Consumption‐Based Explanation of Aggregate Stock Market Behavior
Campbell, J. Y., & Cochrane, J. H. (1999) · Journal of Political Economy · doi:10.1086/250059 · Cited by 5,210
Cited by
Nominal Rigidities and the Dynamic Effects of a Shock to Monetary Policy
Christiano, L. J., Eichenbaum, M., & Evans, C. L. (2005) · Journal of Political Economy · doi:10.1086/426038 · Cited by 6,238
Testing for Indeterminacy: An Application to U.S. Monetary Policy
Lubik, T. A., & Schorfheide, F. (2004) · American Economic Review · doi:10.1257/000282804322970760 · Cited by 868
Speed Limit Policies: The Output Gap and Optimal Monetary Policy
Walsh, C. E. (2003) · American Economic Review · doi:10.1257/000282803321455278 · Cited by 303
Metadata
- Authors
- Fuhrer, J. C.
- Venue
- American Economic Review
- Publisher
- American Economic Association
- Published
- 2000-06-01
- Volume
- 90
- Issue
- 3
- Pages
- 367-390
- ISSN
- 0002-8282 (ISSN-L)
- OpenAlex
- W2135814741
- Cited by
- 1,146
- References
- 2
- FWCI
- 91.61
- Type
- journal article
- Language
- en
- Open access
- closed
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- Fuhrer, J. C. (2000). Habit Formation in Consumption and Its Implications for Monetary-Policy Models. American Economic Review. https://doi.org/10.1257/aer.90.3.367
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Bibliographic data: Semantic Scholar, OpenAlex, Crossref.
Contains information from the Semantic Scholar Academic Graph Datasets, made available under the ODC Attribution License (ODC-BY 1.0).
Semantic Scholar’s data is described in: Kinney, R., et al. (2023). The Semantic Scholar Open Data Platform. arXiv:2301.10140.
