کد مقاله | کد نشریه | سال انتشار | مقاله انگلیسی | نسخه تمام متن |
---|---|---|---|---|
967950 | 931424 | 2007 | 16 صفحه PDF | دانلود رایگان |

This paper assesses the empirical performance Calvo style models of price re-optimization. We first show that versions of these models in which firms update non-re-optimized prices to lagged inflation account well for the statistical behavior of post-war U.S. inflation rates. We then investigate whether these models imply plausible degrees of inertia in price setting behavior by firms. They do, but only if we depart from two standard auxiliary assumptions: monopolistically competitive firms face a constant elasticity of demand, and capital is homogeneous and can be instantaneously reallocated after a shock. We develop a version of the model in which these assumptions are relaxed and show that it is consistent with the view that firms re-optimize prices, on average, once every two quarters.
Journal: Journal of Monetary Economics - Volume 54, Issue 7, October 2007, Pages 2032–2047