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Staggered Price and Trend Inflation:Some Nuisances

Listed author(s):
  • Ascari, Guido

    (University of Pavia)

Most of the papers in the sticky-price literature are based on a log-linearisation around the zero inflation steady state, a simplifying but counterfactual assumption. This paper shows that when trend inflation is considered, both\ the long-run and the short run properties of time dependent staggered price models change dramatically. It follows that the results obtained by models log-linearised around a zero inflation steady state might be misleading.

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Paper provided by Royal Economic Society in its series Royal Economic Society Annual Conference 2002 with number 10.

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Date of creation: 29 Aug 2002
Handle: RePEc:ecj:ac2002:10
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