Meginmál

Seminar on "New perspectives on depreciation shocks as a source of business cycle fluctuations."

Seminar on "New perspectives on depreciation shocks as a source of business cycle fluctuations."

NOTE: This article is from 29. June 2010 and is therefore more than 5 years old.

A seminar will be held in The Central Bank of Iceland's conference room, Sölvhóll, on Tuesday 29 June at 15:00.

The seminar will be led by Martin Seneca, economist at the Central Bank of Iceland and the seminar will be on "New perspectives on depreciation shocks as a source of business cycle fluctuations." The seminar will be in English.

Summary: In this paper we study the transmission for capital depreciation shocks. The existing literature in the Real Business Cycle tradition has concluded that these shocks are irrelevant for business cycle fluctuations. We show that these shocks are a potentially important drivers of aggregate fluctuations in a New Keynesian model. Nominal rigidities and some persistence in the shock process are the key ingredients to generate co-movement across real variables.