This paper aims to contribute to our understanding of inflation dynamics in the United Kingdom by estimating two dynamic stochastic general equilibrium models and assessing the role of nominal and real rigidities within them. We first obtain an empirical representation of the monetary...

It is important to understand how companies set prices, since price-setting behaviour plays a key role in the monetary policy transmission mechanism. Many surveys have been conducted in a range of countries to shed light on this issue by asking companies directly about how they set prices. This...

This paper aims to contribute to our understanding of inflation dynamics in the United Kingdom by estimating two dynamic stochastic general equilibrium models and assessing the role of nominal and real rigidities within them. We first obtain an empirical representation of the monetary...

In this paper we determine how well a 'limited participation' model of the monetary transmission mechanism is able to match important aspects of the UK economy. Such models were developed initially by Lucas (1990), Fuerst (1992) and Christiano and Eichenbaum (1992, 1995), but our version...

In this paper we develop a model of the UK economy in which monetary growth determines inflation, but in which multiple shocks obscure the relationship between money and inflation. It is a general equilibrium model, calibrated to match certain key features of the data, and it falls into the...