hinges on the relationship between the mark-up and the degree of real rigidity of prices. In a model with intermediate goods …, the degree of real rigidity increases in the markup. A weaker response of prices to nominal shocks strengthens the … the mark-up and the real rigidity in a simple closed economy model. We then show numerically how the mark-up can affect …

hinges on the relationship between the mark-up and the degree of real rigidity of prices. In a model with intermediate goods …, the degree of real rigidity increases in the markup. A weaker response of prices to nominal shocks strengthens the … the mark-up and the real rigidity in a simple closed economy model. We then show numerically how the mark-up can affect …

marginal cost, corresponding to a relatively high degree of real rigidity. Finally, our results indicate that backward …

The bulk of literature on real rigidity attempts to identify sources of real rigidity in market imperfections while … of marginal cost to output and through this channel they are shown to determine (i) the degree of real rigidity and (ii …) the degree of endogenous persistence. We find that substantial levels of real rigidity and persistence can be generated …