The reset inflation puzzle and the heterogeneity in price stickiness

Name: The reset inflation puzzle and the heterogeneity in price stickiness
Author: Kara, Engin

İsim	The reset inflation puzzle and the heterogeneity in price stickiness
Yazar	Kara, Engin
Basım Tarihi:	2015-11
Basım Yeri	- Elsevier
Konu	DSGE models, Selection effect, Reset inflation, Calvo, GTE
Tür	Süreli Yayın
Dil	İngilizce
Dijital	Evet
Yazma	Hayır
Kütüphane:	Özyeğin Üniversitesi
Demirbaş Numarası	1873-1295
Kayıt Numarası	28d98c78-b64b-4aba-a049-66486655a0a6
Tarih	2015-11
Örnek Metin	New Keynesian models have been criticised on the grounds that they require implausibly large price shocks to explain inflation. Bils et al. (2012) show that, while these shocks are needed to reduce the excessive inflation persistence generated by the models, they give rise to unrealistically volatile reset price inflation. This paper shows that introducing heterogeneity in price stickiness in the models overcomes these criticisms directed at them. The incorporation of heterogeneity in price stickiness reduces the need for large price shocks. With smaller price shocks, the new model comes close to matching the data on reset inflation.
DOI	10.1016/j.jmoneco.2015.07.002
Cilt	76

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The reset inflation puzzle and the heterogeneity in price stickiness

Yazar Kara, Engin

Basım Tarihi 2015-11

Basım Yeri - Elsevier

Konu DSGE models, Selection effect, Reset inflation, Calvo, GTE

Tür Süreli Yayın

Dil İngilizce

Dijital Evet

Yazma Hayır

Kütüphane Özyeğin Üniversitesi

Demirbaş Numarası 1873-1295

Kayıt Numarası 28d98c78-b64b-4aba-a049-66486655a0a6

Tarih 2015-11

Örnek Metin New Keynesian models have been criticised on the grounds that they require implausibly large price shocks to explain inflation. Bils et al. (2012) show that, while these shocks are needed to reduce the excessive inflation persistence generated by the models, they give rise to unrealistically volatile reset price inflation. This paper shows that introducing heterogeneity in price stickiness in the models overcomes these criticisms directed at them. The incorporation of heterogeneity in price stickiness reduces the need for large price shocks. With smaller price shocks, the new model comes close to matching the data on reset inflation.

DOI 10.1016/j.jmoneco.2015.07.002

Cilt 76