Crucini, Mario J.; Shintani, Mototsugu; Tsuruga, Takayuki - 2021 - This version: March 2021
explained solely by nominal rigidities has long been a puzzle (Rogoff, 1996). Another puzzle from the micro price evidence of … the law of one price (LOP), which is the basic building block of PPP, is that LOP deviations are less persistent than PPP … two-country sticky-price model. We propose a simple test of behavioral inattention and find strong evidence in its favor …