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This paper examines the role of habit persistence in consumption in explaining persistent responses of inflation and …-shaped response while the volatility falls short empirical estimates. The behavior of output and inflation does not change compared to …
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Can nominal contracts make a difference for the neutrality of money if these arise endogenously in general equilibrium? This paper utilizes aversion of Lucas's seminal equilibrium business cycle theory to address this question. However, we depart from Lucas in assuming that (1) agents have...
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undifferentiated final product. If the nominal prices of the differentiated goods are relatively sticky, then unexpected inflation … unexpected inflation abroad. The various versions of the model imply that the relative prices of less competitive goods move …
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