Blanco, Andres; Boar, Corina; Jones, Callum; Midrigan, … - National Bureau of Economic Research - 2024
We develop a tractable sticky price model in which the fraction of price changes evolves endogenously over time and …-equation extension of the Calvo model. This additional equation determines the fraction of price changes. The model features a powerful … inflation accelerator--a feedback loop between inflation and the fraction of price changes--which significantly increases the …