, prompting them to raise markups and prices in anticipation of potentially higher future inflation. These findings establish a … connection between heightened uncertainty, higher core inflation, and increased profits. …

conclusions that arise from the model. In the new model, the level and the variability of inflation is higher than in the Calvo … model with no selection effect. Attempting to lower inflation's variability results in a significant increase output …'s variability, without changing inflation's variability much. …

conclusions that arise from the model. In the new model, the level and the variability of inflation is higher than in the Calvo … model with no selection effect. Attempting to lower inflation's variability results in a significant increase output …'s variability, without changing inflation's variability much …

inflation. Bill, Klenow and Malin (2012) show that, while these shocks are needed to reduce the excessive inflation persistence … generated by the models, they give rise to unrealistically volatile reset price inflation. This paper shows that introducing … the data on reset inflation …

We reformulate the standard open economy new Keynesian model to include positive trend inflation and heterogeneity in … price stickiness suggested by micro-data on prices. We show that when trend inflation is positive, in the standard (single … magnifies this effect, resulting even a smaller determinacy region. When trend inflation is zero, an increase in trade openness …