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On implications of micro price data for macro models

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  • Bartosz Mackowiak
  • Frank Smets

Abstract

The authors review the recent literature that studies new, detailed micro data on prices. They discuss implications of the new micro data for macro models. They argue that the new micro data are helpful for macro models but not decisive. There is no simple mapping from the frequency of price changes in micro data to impulse responses of prices and quantities to shocks. They discuss ideas that promise to deliver macro models matching the impulse responses seen in macro data while being broadly in line with micro data.

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Article provided by Federal Reserve Bank of Boston in its journal Conference Series ; [Proceedings].

Volume (Year): 53 (2008)
Issue (Month): ()
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Handle: RePEc:fip:fedbcp:y:2008:n:53:x:13

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Keywords: Inflation (Finance) ; Unemployment ; Phillips curve;

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