This file is part of IDEAS , which uses RePEc data
[ Papers |
Articles |
Software |
Books |
Chapters |
Authors |
Institutions |
JEL Classification |
NEP reports |
Search |
New papers by email |
Author registration |
Rankings |
Volunteers |
FAQ |
Blog |
Help! ]
Long-run Phillips Curve and Disinfation Dynamics: Calvo vs. Rotemberg Price Setting Author info | Abstract | Publisher info | Download info | Related research | Statistics Rossi Lorenza () (DISCE, Università Cattolica)
Guido Ascari (Università di Pavia)
Additional information is available for the following
registered author(s):
There is widespread agreement that the two most widely used pricing assumptions in the New-Keynesian literature, i.e., Calvo and Rotemberg price-setting mechanisms, deliver equivalent dynamics. We show that, instead, they entail a very di¤erent dynamics of adjustment after a disin?ation, once non linear simulations are employed. In the Calvo model disin?ation implies output gains, while in the Rotemberg model a disin?ation experiment implies output losses. We show that this is due to the di¤erent wedges created by the nominal rigidities in the two models: between output and hours in the Calvo model, while between output and consumption in the Rotemberg model. More- over, unlike the Calvo model, in the Rotemberg model real wage rigidi- ties cause a signi?cant output slump along the adjustment path, thus restoring a dynamics in line both with the conventional wisdom and the empirical evidence.
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page . Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
Paper provided by Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE) in its series DISCE - Quaderni dell'Istituto di Economia e Finanza with number
ief0082.
Download reference. The following formats are available: HTML
(with abstract ),
plain text
(with abstract ),
BibTeX ,
RIS (EndNote, RefMan, ProCite),
ReDIF
Length: nn pages 28
Date of creation: Jun 2008Date of revision:
Handle: RePEc:ctc:serie3:ief0082Contact details of provider: Email: Web page: http://www.unicatt.it/Istituti/EconomiaFinanza More information through EDIRC
For technical questions regarding this item, or to correct its listing, contact: (Massimo Bordignon).
Keywords: Disinfation ; Sticky Prices ; Nonlinearities ; Other versions of this item:
Find related papers by JEL classification: G3 - Financial Economics - - Corporate Finance and Governance
This paper has been announced in the following NEP Reports :
References listed on IDEAS 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.: Stephanie Schmitt-Grohé & Martín Uribe, 2007.
"Optimal simple and implementable monetary and fiscal rules ,"
Working Paper
2007-24, Federal Reserve Bank of Atlanta.
[Downloadable!]
Mankiw, N Gregory, 2001.
"The Inexorable and Mysterious Tradeoff between Inflation and Unemployment ,"
Economic Journal ,
Royal Economic Society, vol. 111(471), pages C45-61, May.
[Downloadable!] (restricted)
Other versions: Robert G. King & Alexander L. Wolman, 1996.
"Inflation Targeting in a St. Louis Model of the 21st Century ,"
NBER Working Papers
5507, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted)
Other versions: Khan, Hashmat, 2005.
"Price-setting behaviour, competition, and markup shocks in the new Keynesian model ,"
Economics Letters ,
Elsevier, vol. 87(3), pages 329-335, June.
[Downloadable!] (restricted)
Other versions: Stephanie Schmitt-Grohe & Martin Uribe, 2004.
"Optimal Simple and Implementable Monetary and Fiscal Rules ,"
NBER Working Papers
10253, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted)
Other versions: Yun, Tack, 1996.
"Nominal price rigidity, money supply endogeneity, and business cycles ,"
Journal of Monetary Economics ,
Elsevier, vol. 37(2-3), pages 345-370, April.
[Downloadable!] (restricted)
Roberts, John M, 1995.
"New Keynesian Economics and the Phillips Curve ,"
Journal of Money, Credit and Banking ,
Blackwell Publishing, vol. 27(4), pages 975-84, November.
[Downloadable!] (restricted)
Rotemberg, Julio J, 1982.
"Monopolistic Price Adjustment and Aggregate Output ,"
Review of Economic Studies ,
Blackwell Publishing, vol. 49(4), pages 517-31, October.
[Downloadable!] (restricted)
Guido Ascari, 2004.
"Staggered prices and trend inflation: some nuisances ,"
Macroeconomics
0404029, EconWPA.
[Downloadable!]
Other versions:
Ascari, Guido, 2003.
"Staggered prices and trend inflation: some nuisances ,"
Research Discussion Papers
27/2003, Bank of Finland.
[Downloadable!] Ascari, Guido, 2002.
"Staggered Price and Trend Inflation:Some Nuisances ,"
Royal Economic Society Annual Conference 2002
10, Royal Economic Society.
[Downloadable!] Guido Ascari, 2004.
"Staggered Prices and Trend Inflation: Some Nuisances ,"
Review of Economic Dynamics ,
Elsevier for the Society for Economic Dynamics, vol. 7(3), pages 642-667, July.
[Downloadable!] (restricted) Schmitt-Grohe, Stephanie & Uribe, Martin, 2007.
"Optimal simple and implementable monetary and fiscal rules ,"
Journal of Monetary Economics ,
Elsevier, vol. 54(6), pages 1702-1725, September.
[Downloadable!] (restricted)
Guido Ascari & Christian Merkl, 2007.
"Real Wage Rigidities and the Cost of Disinflations ,"
IZA Discussion Papers
3049, Institute for the Study of Labor (IZA).
[Downloadable!]
Other versions:
Guido Ascari & Christian Merkl, 2007.
"Real Wage Rigidities and the Cost of Disinflations ,"
Kiel Working Papers
1312, Kiel Institute for the World Economy.
[Downloadable!] Guido Ascari & Christian Merkl, 2009.
"Real Wage Rigidities and the Cost of Disinflations ,"
Journal of Money, Credit and Banking ,
Blackwell Publishing, vol. 41(2-3), pages 417-435, 03.
[Downloadable!] (restricted) Liam Graham & Dennis J. Snower, 2004.
"The real effects of money growth in dynamic general equilibrium ,"
Working Paper Series
412, European Central Bank.
[Downloadable!]
Peter N. Ireland, 2007.
"Changes in the Federal Reserve's Inflation Target: Causes and Consequences ,"
Journal of Money, Credit and Banking ,
Blackwell Publishing, vol. 39(8), pages 1851-1882, December.
[Downloadable!] (restricted)
Other versions:
Peter N. Ireland, 2006.
"Changes in the Federal Reserve's Inflation Target: Causes and Consequences ,"
NBER Working Papers
12492, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted) Peter N. Ireland, 2005.
"Changes in the Federal Reserve's inflation target: causes and consequences ,"
Working Papers
05-13, Federal Reserve Bank of Boston.
[Downloadable!] Peter N. Ireland, 2005.
"Changes in the Federal Reserve’s Inflation Target: Causes and Consequences ,"
Boston College Working Papers in Economics
607, Boston College Department of Economics.
[Downloadable!] Julio Rotemberg, 1987.
"The New Keynesian Microfoundations ,"
NBER Chapters ,
in: NBER Macroeconomics Annual 1987, Volume 2, pages 69-116
National Bureau of Economic Research, Inc.
[Downloadable!]
Calvo, Guillermo A., 1983.
"Staggered prices in a utility-maximizing framework ,"
Journal of Monetary Economics ,
Elsevier, vol. 12(3), pages 383-398, September.
[Downloadable!] (restricted)
Olivier Blanchard & Jordi Galí, 2007.
"Real Wage Rigidities and the New Keynesian Model ,"
Journal of Money, Credit and Banking ,
Blackwell Publishing, vol. 39(s1), pages 35-65, 02.
[Downloadable!] (restricted)
Other versions:
Olivier Blanchard & Jordi Galí, 2005.
"Real Wage Rigidities and the New Keynesian Model ,"
Economics Working Papers
912, Department of Economics and Business, Universitat Pompeu Fabra, revised Oct 2005.
[Downloadable!] Olivier Blanchard & Jordi Galí, 2005.
"Real wage rigidities and the New Keynesian model ,"
Working Papers
05-14, Federal Reserve Bank of Boston.
[Downloadable!] Blanchard, Olivier J & Galí, Jordi, 2005.
"Real Wage Rigidities and the New Keynesian Model ,"
CEPR Discussion Papers
5375, C.E.P.R. Discussion Papers.
[Downloadable!] (restricted) Olivier Blanchard & Jordi Gali, 2005.
"Real Wage Rigidities and the New Keynesian Model ,"
NBER Working Papers
11806, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted) Lawrence J. Christiano & Martin Eichenbaum & Charles L. Evans, 2005.
"Nominal Rigidities and the Dynamic Effects of a Shock to Monetary Policy ,"
Journal of Political Economy ,
University of Chicago Press, vol. 113(1), pages 1-45, February.
Other versions:
Lawrence J. Christiano & Martin Eichenbaum & Charles Evans, 2001.
"Nominal Rigidities and the Dynamic Effects of a Shock to Monetary Policy ,"
NBER Working Papers
8403, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted) Lawrence J. Christiano & Martin Eichenbaum & Charles L. Evans, 2001.
"Nominal rigidities and the dynamic effects of a shock to monetary policy ,"
Working Paper Series
WP-01-08, Federal Reserve Bank of Chicago.
[Downloadable!] Lawrence J. Christiano & Martin Eichenbaum & Charles Evans, 2001.
"Nominal rigidities and the dynamic effects of a shock to monetary policy ,"
Working Paper
0107, Federal Reserve Bank of Cleveland.
[Downloadable!] Lawrence J. Christiano & Martin Eichenbaum & Charles Evans, 2001.
"Nominal rigidities and the dynamic effects of a shock to monetary policy ,"
Proceedings ,
Federal Reserve Bank of San Francisco, issue Jun.
[Downloadable!]
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.)
Maria Flavia Ambrosanio & Massimo Bordignon & Floriana Cerniglia, 2008.
"Constitutional reforms, fiscal decentralization and regional fiscal flows in Italy ,"
DISCE - Quaderni dell'Istituto di Economia e Finanza
ief0084, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
[Downloadable!]
Access and
download statistics Did you know? A few items listed on IDEAS are over 2000 years old!
This page was last updated on 2009-10-28.
This information is provided to you by IDEAS at the Department of Economics , College of Liberal Arts and Sciences , University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics .