Equilibrium Growth, Inflation, and Bond Yields - Duke University's ...

Figure 6: Expected Inflation and Growth Mechanisms (Productivity Shock)
a
w−k
l
n−k
6
4
Technology Shock (ε > 0)
2
0 20 40 60
4
2
0
−2
0 20 40 60
2
1
0
−1
0 20 40 60
2
0
−2
−4
0 20
quarters
40 60
E[∆ z]
mc
π
E[π]
0.5
0
Technology Shock (ε > 0)
−0.5
0 20 40 60
0
−0.5
−1
0 20 40 60
0
−0.5
−1
0 20 40 60
0
−0.5
−1
0 20
quarters
40 60
This figure shows quarterly log-deviations from the steady state for the benchmark endogenous growth model ENDO
1 (solid line) and the neoclassical models (dashed line) from a one standard deviation shock to technology. All
deviations are in annualized percentage units.
49