output of durable and nondurable goods following a monetary policy shock. We show that heterogeneous factor markets allow any … output and inflation, as observed in a vectorautoregression analysis. In contrast to backward indexation to past inflation …, which is often assumed in the literature, sticky information leads to a hump-shaped response in the inflation of flexibly …

model provides micro-foundations for a nonlinear Phillips curve: the sensitivity of inflation to activity increases after … large shocks due to an endogenous rise in the frequency of price changes, as observed during the recent inflation surge. In … response to large cost-push shocks, optimal policy leverages the lower sacrifice ratio to reduce inflation and stabilize the …

policy analysis, researchers should use a menu cost model like ours or at least a third, theory-based shortcut: set the Calvo …

shock. The changes in the responses of sectoral inflation rates are entirely driven by services deepening … endogenously over time. The rise of services dampens the responses of aggregate and sectoral inflation rates to a monetary policy …

cyclical movements in Treasury bond premia. Downward nominal rigidities create state-dependence in output and inflation … dynamics: a higher level of inflation makes prices more flexible, leading output and inflation to be more volatile, and bonds … to become more risky. The model matches well the relation between the level of inflation and a number of salient macro …

aggregate demand still can cause significant inflation. …

fraction of price changes increases with inflation. In addition, in the presence of strategic complementarities, they predict …

replicate empirical responses to an interest rate shock. -- Inflation Dynamics ; New Keynesian Phillips Curve; Business …This paper shows how endogeneous inflation inertia is generated by a simple modificaton of the quadratic adjustment … cost structure faced by economic agents. We derive the pertinent inflation relationships based on purely nominal rigidities …