rigidities impede policymakers' ability to control inflation. And third, we describe how alternative shock/rigidity combinations … monetary policymaking. First, we discuss why trimmed means provide the best measure of core inflation. Second, we outline how … create inflation's grease (whereby it improves economic efficiency by speeding adjustment) and sand effects (whereby it …

inflation and persistence in output. The key features of our model are those that prevent a sharp rise in marginal costs after … an expansionary shock to monetary policy. Of these features, the most important are staggered wage contracts of average …

inflation is inertial. Microeconomic data indicate that firms change prices frequently. We formulate and estimate a model which … resolves this apparent micro - macro conflict. Our model is consistent with post-war U.S. evidence on inflation inertia even …

minimizing a loss function with three terms, involving measures of the variability of wage inflation, price inflation and the …

inflation. Hence, the initial response of inflation to monetary shocks is not sufficient to discriminate across models and for …

We propose an analytical method to analyze the propagation of a once-and-for-all shock in a broad class of sticky price …-sectional distribution of firms' desired adjustments. A key novelty is that, under assumptions that are appropriate for low-inflation … shock (any displacement of the invariant distribution). We present several applications and discuss extensions …

policy analysis, researchers should use a menu cost model like ours or at least a third, theory-based shortcut: set the Calvo …