An equilibrium analysis of relative price changes and aggregate inflation

• 成果类型: Article
• 署名作者: Balke, NS; Wynne, MA
• 署名单位: Southern Methodist University; Federal Reserve System - USA; Federal Reserve Bank - Dallas
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/S0304-3932(99)00051-3
• 发表日期: 2000
• 页码: 269-292
• 关键词: relative prices; inflation; cross-section distribution of prices

摘要

Inflation is positively correlated with the variability of relative prices as measured by the standard deviation of the cross-section distribution of prices, and also with the third moment (skewness) of the cross-section distribution of prices. The conventional interpretation of these relationships is that they reflect sluggishness in the adjustment of individual prices in response to shocks. In this paper we question this interpretation. First, we show that similar correlations among the moments exist in alternative measures of underlying technology shocks. Second, when these shocks are fed into a general equilibrium model with multiple sectors and flexible prices, the resulting prices also display a positive correlation between aggregate inflation and skewness of the cross-section distribution. (C) 2000 Elsevier Science B.V. All rights reserved.