Monetary neutrality in one specific class of DGE model with staggered prices
In this paper I show that monetary neutrality proposition holds for one specific parameterization of a dynamic general equilibrium model of monopolistic competition even if nominal rigidity in a form of staggered price setting or partial adjustment price-setting mechanism is present in a model. This parameterization is a result of a zero profit condition for intermediate goods producers and it requires that degree of increasing returns in intermediate goods production is equal to price- marginal costs markup.
|Date of creation:||10 Dec 2001|
|Note:||Type of Document - MS Word; prepared on IBM PC ; to print on HP/; pages: 10|
|Contact details of provider:|| Web page: http://econwpa.repec.org|
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.:
- Jordi Galí, 1993.
"Monopolistic competition, business cycles and the composition of aggregate demand,"
Economics Working Papers
45, Department of Economics and Business, Universitat Pompeu Fabra.
- Gali Jordi, 1994. "Monopolistic Competition, Business Cycles, and the Composition of Aggregate Demand," Journal of Economic Theory, Elsevier, vol. 63(1), pages 73-96, June.
- Gali, J., 1991. "Monopolistic Competition, Business Cycles and the Composition of Aggregate Demand," Papers 92-03, Columbia - Graduate School of Business.
- Laurence Ball & David Romer, 1990.
"Real Rigidities and the Non-Neutrality of Money,"
Review of Economic Studies,
Oxford University Press, vol. 57(2), pages 183-203.
- Roger E.A. Farmer, 1990.
UCLA Economics Working Papers
588, UCLA Department of Economics.
- repec:nbr:nberre:0126 is not listed on IDEAS
- Farmer, R.E.A., 1999.
"Two New Keynesian Theories of Sticky Prices,"
Economics Working Papers
eco99/33, European University Institute.
- repec:cup:macdyn:v:4:y:2000:i:1:p:74-107 is not listed on IDEAS
- V. V. Chari & Patrick J. Kehoe & Ellen R. McGrattan, 1998.
"Sticky price models of the business cycle: can the contract multiplier solve the persistence problem?,"
217, Federal Reserve Bank of Minneapolis.
- V. V. Chari & Patrick J. Kehoe & Ellen R. McGrattan, 2000. "Sticky Price Models of the Business Cycle: Can the Contract Multiplier Solve the Persistence Problem?," Econometrica, Econometric Society, vol. 68(5), pages 1151-1180, September.
- V. V. Chari & Patrick J. Kehoe & Ellen R. McGrattan, 1996. "Sticky Price Models of the Business Cycle: Can the Contract Multiplier Solve the Persistence Problem?," NBER Working Papers 5809, National Bureau of Economic Research, Inc.
- Michael T. Kiley, 1997. "Staggered price setting and real rigidities," Finance and Economics Discussion Series 1997-46, Board of Governors of the Federal Reserve System (U.S.).
- Kevin X. D. Huang & Zheng Liu, 1998.
"Staggered Contracts and Business Cycle Persistence,"
Cahiers de recherche CREFE / CREFE Working Papers
105, CREFE, Université du Québec à Montréal.
- Kevin Huang & Z. Liu, "undated". "Staggered contracts and business cycle persistence," Working Papers 2000-08, Utah State University, Department of Economics.
- Huang, K.X. & Liu, Z., 1999. "Staggered Contracts and Business Cycle Persistence," Papers 305, Minnesota - Center for Economic Research.
- Kevin X. D. Huang & Zheng Liu, 1998. "Staggered contracts and business cycle persistence," Discussion Paper / Institute for Empirical Macroeconomics 127, Federal Reserve Bank of Minneapolis.
- Blanchard, Olivier Jean & Kiyotaki, Nobuhiro, 1987. "Monopolistic Competition and the Effects of Aggregate Demand," American Economic Review, American Economic Association, vol. 77(4), pages 647-666, September.
- Calvo, Guillermo A., 1983. "Staggered prices in a utility-maximizing framework," Journal of Monetary Economics, Elsevier, vol. 12(3), pages 383-398, September.
- Taylor, John B, 1980.
"Aggregate Dynamics and Staggered Contracts,"
Journal of Political Economy,
University of Chicago Press, vol. 88(1), pages 1-23, February.
When requesting a correction, please mention this item's handle: RePEc:wpa:wuwpma:0112003. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (EconWPA)
If references are entirely missing, you can add them using this form.