prices and wages. Second, the estimated model is used to analyze the welfare properties of various interest rate rules for … between the variances of price and wage inflation and the output gap. This tradeoff implies that it is desirable for the … monetary authority to respond to more than inflation, output, and past interest rates when setting the current interest rate …

This paper examines the responses of prices at different stages of production to an explicitly identified demand shock … used to identify the policy shock as the innovation to the federal funds rate in a VAR. The adjustment of prices at … crude materials, intermediate goods, and finished goods; (b) the newer industry-based PPIs of input and output prices for …