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On Implications of Micro Price Data for Macro Models

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Author Info
Mackowiak, Bartosz Adam
Smets, Frank

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Abstract

We review the recent literature that studies new, detailed micro data on prices. We discuss implications of the new micro data for macro models. We 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. We 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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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 6961.

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Date of creation: Sep 2008
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Handle: RePEc:cpr:ceprdp:6961

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Related research
Keywords: micro price data; models of price setting; real effects of nominal shocks; sticky prices;

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Find related papers by JEL classification:
E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles
E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit

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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Maarten Dossche, 2009. "Understanding inflation dynamics : Where do we stand ?," Research series 200906-11, National Bank of Belgium. [Downloadable!]
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