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Strike while the iron is hot : optimal monetary policy with a nonlinear Phillips curve

Karadi, Peter; Nakov, Anton; Nuño, Galo; Pasten, Ernesto; … - 2024 - This version: September 19, 2024

We study the Ramsey optimal monetary policy within the Golosov and Lucas (2007) state-dependent pricing framework. The model provides micro-foundations for a nonlinear Phillips curve: the sensitivity of inflation to activity increases after large shocks due to an endogenous rise in the frequency...

Persistent link: https://www.econbiz.de/10015071168

A theory of price adjustment under loss aversion

Ahrens, Steffen; Pirschel, Inske; Snower, Dennis J. - 2014

We present a new partial equilibrium theory of price adjustment, based on consumer loss aversion. In line with prospect … theory, the consumers' perceived utility losses from price increases are weighted more heavily than the perceived utility … an otherwise standard dynamic neoclassical model of monopolistic competition. The resulting theory of price adjustment is …

Persistent link: https://www.econbiz.de/10010354159

Price rigidity and the origins of aggregate fluctuations

Pasten, Ernesto; Schoenle, Raphael; Weber, Michael - 2018 - This version: August 2018

We document a novel role of heterogeneity in price rigidity: It strongly amplifies the capacity of idiosyncratic shocks to drive aggregate fluctuations. Heterogeneity in price rigidity also completely changes the identity of sectors from which fluctuations originate. We show these results both...

Persistent link: https://www.econbiz.de/10011891743

Financial constraints and nominal price rigidities

Balleer, Almut; Hristov, Nikolay; Menno, Dominik - 2017

This paper investigates how financial market imperfections and the frequency of price adjustment interact. Based on new firm-level evidence for Germany, we document that financially constrained firms adjust prices more often than their unconstrained counterparts, both upwards and downwards. We...

Persistent link: https://www.econbiz.de/10011597241

Optimal trend inflation

Adam, Klaus; Weber, Henning - 2018

Sticky price models featuring heterogeneous firms and systematic firm-level productivity trends deliver radically different predictions for the optimal inflation rate than their popular homogenous-firm counterparts: (1) the optimal steady-state inflation rate generically differs from zero and...

Persistent link: https://www.econbiz.de/10011845313

State-dependent or time-dependent pricing? : new evidence from a monthly firm-level survey: 1980-2017

Dixon, Huw; Grimme, Christian - 2019

We take a monthly panel of German firms over the period 1980−2017 to examine the relative importance of time and state dependence in the decisions of firms to raise, lower or leave their price constant. In addition, we seek to estimate the relative importance of macroeconomic factors and...

Persistent link: https://www.econbiz.de/10012103943

Behavioral New Keynesian models : learning vs. cognitive discounting

Meggiorini, Greta; Milani, Fabio - 2021

This paper estimates a New Keynesian model with new and old behavioral elements. Agents in the model exhibit cognitive discounting, or myopia: they discount variables far into the future at higher rates than typically implied in the benchmark model. We investigate the model under different...

Persistent link: https://www.econbiz.de/10012509319

Price change synchronization within and between firms

Nilsen, Øivind Anti; Skuterud, Håvard; Webster, … - 2021

-firm synchronization is found supporting the theory of economies of scope in menu costs. The industry synchronization effects are found to …

Persistent link: https://www.econbiz.de/10012612687

Monetary policy, price setting, and credit constraints

Balleer, Almut; Zorn, Peter - 2019

We estimate the effects of monetary policy on price-setting behavior in administrative micro data underlying the German producer price index. We find a strong degree of monetary nonneutrality. After expansionary monetary policy, the mass of additional price adjustments is economically small and...

Persistent link: https://www.econbiz.de/10012138873

Pass-through of cost-push shocks

Gödl-Hanisch, Isabel; Menkhoff, Manuel - 2023

This paper examines the pass-through of cost-push shocks to customers at a granular level. Using unique firm-level survey data, we document five facts about pass-through across firms, sectors, and over time. We highlight a new channel relevant for pass-through: beliefs about the expected...

Persistent link: https://www.econbiz.de/10014306740