Klenow, Peter J.; Willis, Jonathan L. - Federal Reserve Bank of Kansas City - 2006
In the U.S. and Europe, prices change somewhere between every six months and once a year. Yet nominal macro shocks seem to have real effects lasting well beyond a year. "Sticky information" models, as posited by Sims (2003), Woodford (2003), and Mankiw and Reis (2002), can reconcile micro...