Ravn, Morten; Schmitt-Grohe, Stephanie; Uribe, Martin - Department of Economics, European University Institute - 2008
A number of empirical studies document that marginal cost shocks are not fully passed through to prices at the firm …, Schmitt-Grohe, and Uribe (2006), firm-specific marginal cost shocks are not fully passed through to product prices. That is … decline in the firm-specific markup of prices over marginal costs. Pass-through is predicted to be even lower when shocks to …