Firm Entry, In ation and the Monetary Transmission Mechanism V. Lewis and C. Poilly

@inproceedings{Lewisy2011FirmEI,
  title={Firm Entry, In ation and the Monetary Transmission Mechanism V. Lewis and C. Poilly},
  author={Vivien Lewisy and C{\'e}line Poillyz},
  year={2011}
}
  • Vivien Lewisy, Céline Poillyz
  • Published 2011
This paper estimates a business cycle model with endogenous …rm entry by matching impulse responses to a monetary policy shock in US data. Our VAR includes net business formation, pro…ts and markups. We evaluate two channels through which entry may in‡uence the monetary transmission process. Through the competition e¤ect, the arrival of new entrants makes the demand for existing goods more elastic, and thus lowers desired markups and prices. Through the variety e¤ect, increased …rm and product… CONTINUE READING

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