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Persistent link: https://www.econbiz.de/10003483637
We provide a simple theory of inflation inertia in a staggered price setting framework à la Calvo (1983). Contrary to Calvo's formulation, the frequency of price changes is allowed to vary according to an evolutionary criterion. Inertia is the direct result of gradual adjustment in this...
Persistent link: https://www.econbiz.de/10005690419