inflation - is a central determinant of welfare, the cost of business cycles, the optimal rate of inflation, and the tradeoff … between inflation and output stability. While the comovement of price dispersion and inflation implied by standard models is … the data, the comovement of price dispersion and inflation turns positive. Nevertheless, I show that a wide variety of …

Persistent responses of inflation to monetary policy shocks have been difficult to explain by existing models of the … monetary transmission mechanism without embedding controversial intrinsic inertia of inflation. Our paper addresses this issue … using a staggered price model with trend inflation, a smoothed-off kink in demand curves, and a fixed cost of production. In …

Many sticky-price models suggest that relative price distortion is one of the major costs of inflation. We show that … this resource misallocation is costly even at quite low rates of inflation. This is because inflation strongly affects … has a persistent, negative hump-shaped impact on inflation, but may have a positive hump-shaped impact on output. Observed …

The correlation between persistent changes in the markup in one sector of an economy and the inflation rate is …. We find that the correlation is in general positive under an exogenous money growth rule as well as under an inflation … targeting rule. That is, a decrease of the markup leads to a decrease in the CPI-inflation rate. However, if inflation is …