In the Eurozone price stickiness differs among countries. I explore its consequences on the optimal rate of inflation … in a two-country model. On the one hand, with local currencies an inflation tax is partly imposed on the foreign country … optimal inflation is positive, ii) in a monetary union the first motive is absent and the optimal inflation is negative and …

changing prices frequently do so even under low inflation. What happens to price setting strategies of sticky price goods under … moderate inflation? We built a dataset of monthly newspaper and magazine prices for Colombia, for the period 1960-2005, an … exceptional example of prolonged moderate inflation. Within this macroeconomic scenario, and the novel database, we study the …

inflation is inertial. Microeconomic data indicate that firms change prices frequently. We formulate and estimate a model which … resolves this apparent micro - macro conflict. Our model is consistent with post-war U.S. evidence on inflation inertia even …

. 'Looser' monetary policy, which implies a higher mean inflation rate, and a higher volatility of the exchange rate, will lead … nonlinear, relationship between pass-through and mean inflation, and a positive relationship between passthrough and exchange …

adjustment. As a result, the response of inflation to nominal shocks is both sluggish and hump-shaped. The model can also … qualitatively capture a number of stylized facts about price setting at the micro level and inflation at the macro level …

Price inflation in the euro area has been stable and low since the Global Financial Crisis, despite notable changes in … output and unemployment. We show that an increasing share of high markup firms is part of the explanation of why inflation … countries and, by linking these markup developments to the evolution of sectoral level producer and consumer price inflation, we …