Karadi, Peter; Reiff, Adam - Közgazdaság-tudományi Intézet, Közgazdaság- és … - 2007
The paper explains the observed asymmetric inflation response to value-added tax (VAT) changes in Hungary by calibrating a standard sectoral menu cost model on a new micro-level CPI data set. The model is able to reproduce important moments of the data, and finds that the asymmetry can be...