We construct and calibrate a general equilibrium business cycle model with unemployment and precautionary saving. We compute the cost of business cycles and locate the optimum in a set of simple cyclical fiscal policies. Our economy exhibits productivity shocks, giving firms an incentive to hire...

In this paper, we show that a simple model of smoothly state-dependent pricing generates a distribution of price adjustments similar to that observed in microeconomic data, both for low and high inflation. Our setup is based on one fundamental assumption: price adjustment is more likely when it...

This paper analyzes the effects of monetary shocks in a DSGE model that allows for a general form of smoothly state-dependent pricing by firms. As in Dotsey, King, and Wolman (1999) and Caballero and Engel (2007), our setup is based on one fundamental property: firms are more likely to adjust...

Proponemos un modelo cuasi racional de ajustes de precios en el mercado minorista que es coherente con la evidencia micro y macro de la dinámica de los precios. Nuestro marco está basado en la idea de que evitar errores en las decisiones implica un coste. Dada la asumida función del coste de...

Este trabajo propone dos modelos donde las empresas pueden cambiar sus precios libremente en cualquier momento sin ningún coste físico, pero donde, no obstante, los precios son rígidos por razones endógenas. Las empresas se enfrentan a shocks idiosincrásicos y agregados, y también corren...

Starting from the assumption that firms are more likely to adjust their prices when doing so is more valuable, this paper analyzes monetary policy shocks in a DSGE model with firm-level heterogeneity. The model is calibrated to retail price microdata, and inflation responses are decomposed into...

El presente trabajo resume la literatura existente relativa a los modelos de ajuste de los precios nominales, centrándose en los modelos de comportamiento óptimo o casi óptimo. El documento abarca tres clases principales de mecanismos: 1) modelos que suponen un coste fijo (menu cost) al...

An increase in aggregate productivity raises consumption but causes labor to fall. Also, impulse responses differ depending on the distribution at the time the shock occurs. In particular, increased money growth has different effects starting from the steady state distribution than it does if...

In ongoing work, we are also estimating a generalized model in which both the price chosen, and the decision of whether or not to adjust the price, are subject to logit errors. This should allow us to distinguish whether intermittent adjustment is driven primarily by a risk of errors or by...