Similar Search Results

No Pain, All Gain? Exchange Rate Flexibility and the Expenditure-Switching Effect

Carriere-Swallow, Yan - 2018

Theoretical models on the relationship between prices and exchange rates predict that the magnitude of expenditure switching affects the optimal choice of exchange rate regime. Focusing on the transmission of terms-of-trade shocks to domestic real variables we document that the magnitude of the...

Persistent link: https://www.econbiz.de/10012907952

The Propagation of Monetary Policy Shocks in a Heterogeneous Production Economy

Pasten, Ernesto - 2019

We study the transmission of monetary policy shocks in a model in which realistic heterogeneity in price rigidity interacts with heterogeneity in sectoral size and input-output linkages, and derive conditions under which these heterogeneities generate large real effects. Empirically,...

Persistent link: https://www.econbiz.de/10012892210

Selection and Monetary Non-Neutrality in Time-Dependent Pricing Models

Carvalho, Carlos - 2018

For a given frequency of price adjustment, monetary non-neutrality is smaller if older prices are disproportionately more likely to change. This type of selection for the age of prices provides a complete characterization of price-setting frictions in time-dependent sticky-price models....

Persistent link: https://www.econbiz.de/10012938622

Are 'Intrinsic Inflation Persistence' Models Structural in the Sense of Lucas (1976)?

Benati, Luca - 2009

Following Fuhrer and Moore (1995), several authors have proposed alternative mechanisms to 'hardwire' inflation persistence into macroeconomic models, thus making it structural in the sense of Lucas (1976). Drawing on the experience of the European Monetary Union, of inflation-targeting...

Persistent link: https://www.econbiz.de/10012764450

Parameter Bias in an Estimated DSGE Model : Does Nonlinearity Matter?

Hirose, Yasuo - 2015

How can parameter estimates be biased in a dynamic stochastic general equilibrium model that omits nonlinearity in the economy? To answer this question, we simulate data from a fully nonlinear New Keynesian model with the zero lower bound constraint and estimate a linearized version of the...

Persistent link: https://www.econbiz.de/10013011223

Does Product Revenue Matter for Price Setting and Monetary Policy Transmission?

Kang, Dongik - 2020

Using retail scanner data, we find that the probability of price adjustment increases with a product's revenue, and the average absolute size of price adjustment decreases with the product's revenue. Furthermore, the responsiveness of prices to monetary shocks increases with product revenue....

Persistent link: https://www.econbiz.de/10012849676

The Propagation of Monetary Policy Shocks in a Heterogeneous Production Economy

Pasten, Ernesto - 2020

Realistic heterogeneity in price rigidity interacts with heterogeneity in sectoral size and input-output linkages in the transmission of monetary policy shocks. Quantitatively, heterogeneity in price stickiness is the central driver for real effects. Input-output linkages and consumption shares...

Persistent link: https://www.econbiz.de/10012850842

The Cross-sectional Distribution of Price Stickiness Implied by Aggregate Data

Carvalho, Carlos - 2020

This paper provides evidence on three mechanisms that can reconcile frequent individual price changes with sluggish aggregate price dynamics. To that end, we estimate a semi-structural model that allows us to extract information about real rigidities and the distribution of price stickiness from...

Persistent link: https://www.econbiz.de/10012856371

Search with Wage Posting under Sticky Prices

Foerster, Andrew T. - 2020

This paper examines the implications of interacting pricing frictions, labor market frictions,and consumption risk by … comparing variants of a New Keynesian model. The model variantsmake alternative assumptions about whether hiring and pricing … unemployment benefits or persistently below-target inflation depends on whether hiring and pricing decisions are integrated …

Persistent link: https://www.econbiz.de/10012856417

Sectoral Price Facts in a Sticky-Price Model

Carvalho, Carlos - 2020

We develop a multisector sticky-price DSGE model that can endogenously deliver differential responses of prices to aggregate and sectoral shocks. Input-output production linkages and a (standard) monetary policy rule contribute to a slow response of prices to aggregate shocks. In turn, labor...

Persistent link: https://www.econbiz.de/10012857547