Caballero, Ricardo J.; Engel, Eduardo M.R.A. - Cowles Foundation for Research in Economics, Yale University - 2007
What is the relation between infrequent price adjustment and the dynamic response of the aggregate price level to monetary shocks? The answer to this question ranges from a one-to-one link (Calvo, 1983) to no connection whatsoever (Caplin and Spulber, 1987). The purpose of this paper is to...