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 …

We analyze the welfare cost of inflation in a model with cash-in-advance constraints and an endogenous distribution of … establishments' productivities. Inflation distorts aggregate productivity through firm entry dynamics. The model is calibrated to the … United States economy and the long-run equilibrium properties are compared at low and high inflation. We find that, when the …

If firms borrow working capital to finance production, then nominal interest rates have a direct influence on inflation … empirical importance in explaining inflation dynamics in the US and in the euro area. -- New Keynesian Phillips Curve ; cost …

This paper studies the long run welfare costs of inflation in a micro-founded model with trading frictions and costly … agent model, the welfare costs of inflation are significantly smaller due to distributional effects of inflation. The … welfare cost of increasing inflation from 0% to 10% is 0.62% of income for the U.S. economy and 0.20% of income for the …

This paper provides new evidence on a long-standing question asked by Shiller (1997): Why do we dislike inflation? I … inflation and their reactions to it. The predominant reason for people's aversion to inflation is the widespread belief that it …-income groups. Inflation also provokes stress, emotional responses, and a sense of inequity, as the wages of high-income individuals …

rate is the key determinant of the longterm interest rate, while the rate of core inflation and the pace of economic …-term interest rates, the rate of inflation, the pace of economic activity, and the fiscal balance ratio on long-term interest rates …