(RIETI and Gakushuin University)

Slides:



Advertisements
Similar presentations
Unit III National Income and Price Determination.
Advertisements

A PRELIMINARY LOOK AT CLIMATE CHANGE EFFECTS ON US CORN MARKET VOLATILITY IN THE CONTEXT OF BIOFUEL MANDATE Wyatt Thompson, Seth Meyer, Elliott Campbell.
ECO 102 Macroeconomics Chapter 3 Aggregate Demand and Aggregate Supply
Deep Habits Morten Ravn (EUI) Stephanie Schmitt-Grohé (Duke) Martín Uribe (Duke)
1 1 Ch17, 18, 19 – MBA 566 Security Valuation and Analysis Macroeconomic and Industry Analysis/Fundamental Analysis Equity Valuation Ratio analysis.
‘’Deep Habits’’ by Morten Ravn, Stephanie Schmitt Grohe and Martin Uribe Ester Faia, Universitat Pompeu Fabra IMOP/ ECB Dynamic Macroeconomic Conference,
Macroeconomics unit What you should know by now. You should be able to : Define the following: Gross Domestic Product (GDP) & the 4 components Unemployment.
 The McGraw-Hill Companies, Inc., 1999 INVESTMENTS Fourth Edition Bodie Kane Marcus Irwin/McGraw-Hill 17-1 Macroeconomic and Industry Analysis Chapter.
Chapter 10 Aggregate Demand and Aggregate Supply: The Basic Model.
The Asset Market, Money, and Prices
Chapter 1: The Science of Macroeconomics. Main Macroeconomic Variables Economic growth rate measures the percentage change of the Real GDP Inflation rate.
MACROECONOMIC IMPLICATIONS OF FINANCIAL CONSTRAINTS 2. Dual role of physical assets as input and collateral. 3. LAPM. 10th set of transparencies for ToCF.
8 CAPITAL, INVESTMENT, AND SAVING CHAPTER.
Chapter 1 Why Study Money, Banking, and Financial Markets?
Review of Microeconomics: Demand, Supply and Prices 1. Write answers to the following without looking them up or asking anyone else. 2. Correct or add.
Chapter 1 Why Study Money, Banking, and Financial Markets?
CARDIO # 6 1.According to the map on your TEXT BOOK page 37, around what physical feature is Egypt's population the densest? 2.Why do you think more people.
Fundamental Analysis Approach to Fundamental Analysis: –Domestic and global economic analysis –Industry analysis –Company analysis Why use the top-down.
CHAPTER 17 Investments Macroeconomic and Industry Analysis Slides by Richard D. Johnson Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights.
CHAPTER 27 Aggregate Supply and Aggregate Demand PowerPoint® Slides by Can Erbil © 2005 Worth Publishers, all rights reserved.
16-1 Consumption The theory of consumption was developed by Milton Friedman in the 1950s, who called it the permanent income theory of consumption, and.
Discussion of ”Should monetary policy lean against the wind? An analysis based on a DSGE model with banking” by Leonardo Gambacorta and Federico M. Signoretti.
Quiz III Consumer and Producer Surplus. 1. Determine the consumer surplus at the equilibrium price shown below
Estimating Households’ Non-financial Assets Presentation to the OECD Working Party on Financial Accounts Patrick O’Hagan System of national Accounts, Statistics.
SHORT-RUN/LONG-RUN GRAPHING Summary. Why Aggregate Demand Slopes downward?  Think about AD from the perspective of the people buying  price level =
Principles of Macroeconomics Lecture 2 CONSUMPTION AND INVESTMENT BUSINESS CYCLES AND AGGREGATE DEMAND.
© 2008 Pearson Education Canada21.1 Chapter 21 The Demand for Money.
Principles of Macroeconomics Lecture 4 BUSINESS CYCLES AND AGGREGATE DEMAND.
Effect of a tax on price and quantity S + tax S O P1P1 Q1Q1 D P Q.
Copyright © 2012 Pearson Addison-Wesley. All rights reserved. Chapter 3 Income and Interest Rates: The Keynesian Cross Model and the IS Curve.
Review of the previous lecture Exchange rates nominal: the price of a country’s currency in terms of another country’s currency real: the price of a country’s.
Aggregate Stock Market 1. Introduction The standard framework for thinking about aggregate stock market behavior has been the consumption-based approach.
Chapter 4 Consumption, Saving, and Investment. Copyright © 2005 Pearson Addison-Wesley. All rights reserved. 4-2 Figure 4.1(a) The index of consumer sentiment,
HBS 2000/01: March National Bureau of Statistics ANALYSIS OF THE HBS 2000/01 INCOME POVERTY.
Macroeconomic Models Aggregate Demand and the Aggregate Demand Curve What framework can we use to: 1) Analyze the three main objectives for an economy?
Growth Decomposition and Productivity Trends Leonardo Garrido and Elena Ianchovichina PRMED March 23, 2009.
Money, Interest and income
Hitotsubashi-RIETI International Workshop
1 The Science of Macroeconomics.
Why Study Money, Banking, and Financial Markets?
Aggregate Demand and Supply
Chapter 9 A Two-Period Model: The Consumption-Savings Decision and Credit Markets Macroeconomics 6th Edition Stephen D. Williamson Copyright © 2018, 2015,
Macroeconomic Strategy Primer
Unit Three: Aggregate Demand.
Macroeconomic Equilibrium (AD/AS)
Romer “The Great Crash and the Onset of the Great Depression”
Chapter 19 The Demand for Money.
Why Study Money, Banking, and Financial Markets?
Chapter 23: Output and Prices in the Short Run
AB 204 Possible-Is- Everything/snaptutorial.com
AB 204 Education for Service-- snaptutorial.com
AB 204 STUDY Lessons in Excellence-- ab204study.com.
AB 204 STUDY Education for Service-- ab204study.com.
AB 204 Teaching Effectively-- snaptutorial.com
Chapter 22 The Demand for Money.
Macroeconomic and Industry Analysis
3. Land Values In this module, we will discuss:
Inflation Rising prices.
Module Aggregate Demand: Introduction and Determinants
CASE FAIR OSTER MACROECONOMICS P R I N C I P L E S O F
CHAPTER 16 © 2006 Prentice Hall Business Publishing Macroeconomics, 4/e Olivier Blanchard Expectations, Consumption, and Investment Prepared by: Fernando.
Aggregate Demand.
Quarterly National Accounts - Orientation
Introduction to AD/AS Model
Output and Prices in the Short Run
Aggregate Demand.
Chou, Mei-Ling Assistant Professor Nanya Institute of Technology
Module Aggregate Demand: Introduction and Determinants
Final Review Game Economics.
Presentation transcript:

(RIETI and Gakushuin University) Comments on “Estimation of Aggregate Demand and Supply Shocks Using Commodity Transaction Data” at Hitotsubashi-RIETI Workshop on Real Estate Market, Productivity, and Prices on October 13, 2016 Tsutomu Miyagawa (RIETI and Gakushuin University)

1. Outline of the Paper Estimation of demand and supply shocks using commodity-level data←an alternative to the time series approach using aggregate data. Analytical procedure Specifying demand and supply functions Estimating category-level elasticity parameters using GMM with three moment conditions Based on the estimation results, authors obtain aggregate demand and supply shocks Checking the consistency of their estimated results with the movements in aggregate price and quantity

1. Outline of the paper (contd.) Main results They find negative supply shocks after the global financial crisis and after 2013. The movements in demand shocks in the case where new products are considered different from those in the case they are not. The former results explain the stock piling behavior before the increase in the consumption tax rate on April 2014.→product turnover is an important factor for the business cycles. The movements in price and quantity at the global financial crisis and during Abenomics are well explained by negative supply shocks and positive demand shocks.

2. Contributions of the Paper Blanchard (NBER WP 14259, 2008) addressed the point that the components and parameters of the DSGE model should be consistent with the estimated parameters using micro data. Following his arguments, this paper studies the movements in aggregate demand and supply shocks based on the micro data. This paper also contributes to the new macroeconomic study on the interactions between product turnover and macroeconomic shocks.

2. Contributions of the paper (contd.) Two approaches on the interaction between product turnover and macroeconomic issues: a consumption side approach and a production side approach. Advantages of the consumption side approach: more sophisticated classification in products and more appropriate frequency for business cycle analysis. Advantages of the production approach: larger coverage for sales, better for the productivity study. Disadvantages of both approaches: the lack of service

3. Comments and Suggestions Major comments Lack of durable goods: consumption in durable goods is sensitive to changes in consumption tax and wealth. Do the authors have any intention including durable goods in their study? Are the movements in price using SRI data consistent with or different from CPI (non-durable goods) ? The difference between consumer price measured in this paper and CPI affects the implications of the aggregate demand and supply shocks.

3. Comments and suggestions (contd.) (iii) Using barcode-level price data leads to downward bias, because it includes price in exit goods. Why don’t the authors show the price data series without product turnover? In addition, the author should show the product destruction rate as shown in Broda and Weinstein. (iv) Endogeneity of product turnover: Bilbiie. Ghironi, and Melitz (JPE, 2012), and Dekle, Jeong, and Kiyotaki (2014) endogenize entry and exit behavior and product turnover. The authors are then able to check whether the new product ratio is affected by aggregate shocks. ・Minor comments - The paper can be improved, if the authors show some examples of product turnover in their data.