inflation should differ between inflation and deflation episodes, using data for Japan and Hong Kong. We use a random cross … the theory predicts. Keywords: inflation, deflation, menu costs, Hong Kong, Japan. … both the inflation and deflation periods, and the parameter on the second moment changes sign in the deflation period, as …

inflation - is a central determinant of welfare, the cost of business cycles, the optimal rate of inflation, and the tradeoff … between inflation and output stability. While the comovement of price dispersion and inflation implied by standard models is … the data, the comovement of price dispersion and inflation turns positive. Nevertheless, I show that a wide variety of …

stronger bargaining position when they try to prevent a cut in money wages. If inflation is so low that some money wages have … to be cut, workers stronger bargaining position requires higher unemployment in equilibrium. However, inflation is more … stable when money wage rigidity binds, providing an incentive for monetary policy makers to choose a low target for inflation …