CANZONERI, MATTHEW B.; CUMBY, ROBERT E.; DIBA, BEHZAD T. - In: Journal of Money, Credit and Banking 39 (2007) 7, pp. 1563-1586
We present a model with Calvo wage and price setting, capital formation, and estimated rules for government spending and monetary policy. Our model captures many aspects of U.S. data, including the volatility that has been observed in various efficiency gaps. We estimate the cost of nominal...