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

  • Anton Nakov

    (Bank of Spain)

  • James Costain

    (Bank of Spain)

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.

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Paper provided by Society for Economic Dynamics in its series 2009 Meeting Papers with number 611.

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Date of creation: 2009
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Handle: RePEc:red:sed009:611
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