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Reset Price Inflation and the Impact of Monetary Policy Shocks

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  • Pete Klenow

    (Stanford University)

  • Ben Malin

    (Federal Reserve Board)

  • Mark Bils

    (University of Rochester)

Abstract

inflation. We find that time-dependent models imply unrealistically high persistence and stability of reset price inflation. This discrepancy is exacerbated by adding strategic complementarities, even under state-dependent pricing. A state-dependent model with no strategic complementarities aligns most closely with the data.

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Paper provided by Society for Economic Dynamics in its series 2010 Meeting Papers with number 1079.

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Date of creation: 2010
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Handle: RePEc:red:sed010:1079

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