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Dynamics of the Price Distribution in a General Model of State-Dependent Pricing

Author

Listed:
  • Anton Nakov

    (Bank of Spain)

  • James Costain

    (Bank of Spain)

Abstract

An increase in aggregate productivity raises consumption but causes labor to fall. Also, impulse responses differ depending on the distribution at the time the shock occurs. In particular, increased money growth has different effects starting from the steady state distribution than it does if all firms have recently received an economy-wide productivity shock.

Suggested Citation

  • Anton Nakov & James Costain, 2009. "Dynamics of the Price Distribution in a General Model of State-Dependent Pricing," 2009 Meeting Papers 611, Society for Economic Dynamics.
  • Handle: RePEc:red:sed009:611
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    File URL: https://economicdynamics.org/meetpapers/2009/paper_611.pdf
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    References listed on IDEAS

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    Cited by:

    1. Emi Nakamura & Jón Steinsson, 2010. "Monetary Non-neutrality in a Multisector Menu Cost Model," The Quarterly Journal of Economics, Oxford University Press, vol. 125(3), pages 961-1013.
    2. Reiter, Michael, 2010. "Approximate and Almost-Exact Aggregation in Dynamic Stochastic Heterogeneous-Agent Models," Economics Series 258, Institute for Advanced Studies.

    More about this item

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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