This paper evaluates new evidence on price setting practices and inflation persistence in the euro area with respect to …

as a tool to compare the characteristics of European inflation dynamics with those observed in the U.S. We also analyse … the factors underlying inflation inertia by examining the cyclical behavior of marginal costs, as well as that of its two …

and its implications for US output, hours and inflation. Second we evaluate the extent to which that responses can be …

We develop and estimate a structural model of inflation that allows for a fraction of firms that use a backward looking … measures of marginal cost as the relevant determinant of inflation, as the theory suggests, instead of an ad-hoc output gap …. Real marginal costs are a significant and quantitatively important determinant of inflation. Backward looking price setting …

implications for the unemployment-inflation tradeoff and for the conduct of monetary policy.We proceed in two steps. We first leave … firms. We derive the relation between inflation and unemployment and discuss how it is influenced by the presence of labor … market frictions and real wage rigidities. We show the nature of the tradeoff between inflation and unemployment …