Costain, James; Nakov, Anton; Petit, Borja - 2019
We study the effects of monetary shocks in a model of state-dependent price and wage adjustment based on "control costs … adjustments. Our simulations are calibrated to microdata on the size and frequency of price and wage changes. Money shocks have … wage rigidity, rather than price rigidity. State-dependent nominal rigidity implies a flatter Phillips curve as trend …