How does competition affect information acquisition of firms and thus the response of inflation and output to monetary policy shocks? This paper addresses these questions in a new dynamic general equilibrium model with both dynamic rational inattention and oligopolistic competition. In the...

Competition can have opposite impacts on the inflation-output trade-off by increasing the real rigidity but lowering the nominal rigidity. We build a New Keynesian model with Kimball aggregator and Calvo staggered pricing. We use the Bayesian method to estimate our model with regional data from...

Recent research and policy discussions have noted that the potentially increased competition among firms since the 1990s may affect inflation and economic activity. This paper considers the implications of this structural change on short-run inflation dynamics, and for assessing shocks to...