. Strong in-sample evidence is found for feedback between median inflation and price dispersion; the evidence for Granger …-causation from median inflation to price dispersion remains strong in out-of-sample testing, but is less strong for Granger …

assumption is at odds with profit-maximizing behavior under Calvo pricing when long-run inflation is positive, we present a new … Keynesian model that relaxes this assumption. Our model predicts that inflation causes a substantially smaller loss in effective … aggregate productivity compared to a benchmark model without the possibility of rationing. Moreover, under positive inflation …

dispersion and biases the estimation of the border effect. We test these predictions using detailed price database at the … estimation increases substantially, while for those goods that do have local competitors the effect of border is negligible. As …