is no longer equivalent to stabilizing output fluctuations. Our analysis suggests that in the presence of financial …

, it is important to investigate their interactions. Furthermore, our analysis indicates that the degree of monetary …

of the business cycle, and for monetary policy in particular. Yet labor market shocks are not important information for …

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 …