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

of the households' consumer price inflation rates or their individual rates, respectively. After a negative demand shock … less under that regime. After a negative supply shock, a central bank only considering the household experiencing the … higher inflation rate mitigates the immediate effects of the shock on both consumer price inflation rates more effectively …

shock leads to a weak response in nominal wage inflation, a modest decline in price inflation, and a modest rise in the real … wage on impact and a permanent rise in the long run. The same shock may lead to a rise or fall in per capita hours …

positively. While the baseline model can match some of these facts for a specific shock process, in its baseline setup the model …

substantial and persistent real effects following a monetary policy shock. Furthermore, the results suggest that the monetary …

fixed long-term production reflecting a fixed full employment level underlies the conventional theory, unless a long …