The reset inflation puzzle and the heterogeneity in price stickiness

• 成果类型: Article
• 署名作者: Kara, Engin
• 署名单位: Ozyegin University
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/j.jmoneco.2015.07.002
• 发表日期: 2015
• 页码: 29-37
• 关键词: DSGE models; Selection effect; Reset inflation; Calvo; GTE

摘要

New Keynesian models have been criticised on the grounds that they require implausibly large price shocks to explain inflation. Bils et al. (2012) show that, while these shocks are needed to reduce the excessive inflation persistence generated by the models, they give rise to unrealistically volatile reset price inflation. This paper shows that introducing heterogeneity in price stickiness in the models overcomes these criticisms directed at them. The incorporation of heterogeneity in price stickiness reduces the need for large price shocks. With smaller price shocks, the new model comes close to matching the data on reset inflation. (C) 2015 Elsevier B.V. All rights reserved.