The recent volatility of inflation has provided considerable data to distinguish among competing theories of inflation. The key competing models are the expectations-augmented Phillips curve, a monetarist equation, and the rational expectations model. This paper replicates the results of earlier...

We consider two competing theories that provide potentially important explanations of price rigidity. The first theory argues that prices are sticky at the aggregate level because of the cumulative effects of relatively short adjustment lags at the firm level. In contrast, the second theory...