This paper argues that the cross-sectional approach to durations is essential to understand nominal rigidity because this captures the fact that price-spells are generated by firms' price-setting behavior. Since the distribution of durations is dominated by a proliferation of short contracts,...

The Generalized Calvo and the Generalized Taylor model of price and wage-setting are, unlike the standard Calvo and Taylor counterparts, exactly consistent with the distribution of durations observed in the data. Using price and wage micro-data from a major euro-area economy (France), we develop...

We examine the relationship between the prices paid by households and their shopping patterns measured in terms of shopping frequency and the range of stores visited. We use the TNS data which allows us to control for household heterogeneity. The main contribution of the paper is that we find...

This paper develops a new class of homothetic preferences which generate Marshallian demand curves for individual goods which can be concave, convex or linear in own price under the assumption that agents treat aggregate price indices as given (as in the Dixit-Stiglitz (1977) monopolistic...

In this paper a unified framework is developed for modelling imperfect competition in a monopolistic economy and in a unionised economy in a dynamic setting. Concentrating on the steady state analysis, a graphical approach is developed in consumption/leisure space. In both cases, there is a...

In this paper, we see how much the average monthly frequency of price changes ties down the behavior of firms in steady-state in terms of the average length of price-spells across firms. We use the UK CPI data at the aggregate and sectoral level and find that the actual mean is about twice the...