smooth price and output responses to demand shocks through inventory adjustment. …

This paper reexamines whether producer prices help predict consumer prices, focusing on model stability and the … for a simple form of instability, however, fails to improve the predictive power of producer prices. Even in models using … prices do not help to forecast consumer prices. …

magazine cover prices. Among the parameters estimated are the mean, variance, and persistence of the adjustment cost process …

information. (2) Firms face heterogeneous, fixed menu costs which they must pay to change prices, leading to state …-dependent sticky prices at the micro level. I estimate key structural parameters and show that a model of sticky prices in a sticky …

prices and wages. Second, the estimated model is used to analyze the welfare properties of various interest rate rules for …