research. An important feature of the model is that it incorporates both stochastic inflation rates and stochastic Purchasing … stochastic differential equations which describe the dynamic paths of a vector of state variables, prices, and PPP deviations …

composition of expenditure, and on the wedge between consumer and domestic prices, rather than on the response of aggregate output … and domestic prices. …

We demonstrate the existence of a monetary policy tradeoff between price-inflation variability and output … the special case in which prices are sticky and wages are perfectly flexible. When the model is calibrated to exhibit an … empirically reasonable degree of nominal wage inertia, strict inflation targeting induces substantial output-gap volatility. …

experienced the most pronounced fluctuations in income and prices of this century. Is our current understanding of the behavior of … suggest that the role of income and prices in determining imports is not known with any precision. This paper offers the first …-1992 data, I find that income and prices do not affect imports whereas the opposite conclusion arises with postwar data. The …

inflation will be higher in countries where prices are initially low. Price level convergence thus provides a potential …If price levels are initially different across the euro area, convergence to a common level of prices would imply that … explanation for recent cross-country differences in European inflation, a worrisome development under the ECBs "one …

We reexamine the evidence for border effects in deviations from the law of one price, using data for consumer prices … rather than price index data. We find evidence of border effects both in the levels of prices and the percentage change in … prices. Even accounting for distance between cities and relative population sizes, we find that the absolute difference …

Using consumer price indexes from cities in the U.S., Canada and Mexico, we estimate the "border effect" on U ….S.-Mexican relative prices and find that it is nearly an order of magnitude larger than for U.S.-Canadian prices. However, during a very … stable sub-period in Mexico (May 1988 to November 1994), the "width" of the U.S.-Mexican border falls dramatically and …

We use new disaggregated data on consumer prices to determine why there is variability in prices of similar goods … purely a result of market segmentation or do sticky nominal prices play a role? We also examine how the degree of tradability … the variation in prices between pairs of cities. But we also find that nominal price stickiness plays an even more …