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New Evidence on Inflation Persistence and Price Stickiness in the Euro Area: Implications for Macro Modeling

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  • Ignazio Angeloni
  • Luc Aucremanne
  • Michael Ehrmann
  • Jordi Galí
  • Andrew Levin
  • Frank Smets

Abstract

This paper evaluates new evidence on price-setting practices and inflation persistence in the euro area with respect to its implications for macro modeling. It argues that several of the most commonly used assumptions in micro-founded macro models are seriously challenged by the new findings. (JEL: E31, E52) (c) 2006 by the European Economic Association.

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Bibliographic Info

Article provided by MIT Press in its journal Journal of the European Economic Association.

Volume (Year): 4 (2006)
Issue (Month): 2-3 (04-05)
Pages: 562-574

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Handle: RePEc:tpr:jeurec:v:4:y:2006:i:2-3:p:562-574

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