Temporary Price Changes, Inflation Regimes, and the Propagation of Monetary Shocks

• 成果类型: Article
• 署名作者: Alvarez, Fernando; Lippi, Francesco
• 署名单位: University of Chicago; Luiss Guido Carli University
• 刊物名称: AMERICAN ECONOMIC JOURNAL-MACROECONOMICS
• ISSN/ISSBN: 1945-7707
• DOI: 10.1257/mac.20180383
• 发表日期: 2020
• 页码: 104-152
• 关键词: menu cost; models

摘要

We present a sticky price model that features the coexistence of many price changes, most of which are temporary, with a modest flexibility of the aggregate price level. Stickiness is introduced in the form of a price plan, namely a set of two prices: either price can be charged at any moment but changing the plan entails a menu cost. We analytically solve for the optimal plan and for the aggregate output response to a monetary shock. We present evidence consistent with the model implications using scanner data, as well as Consumer Price Index data across a wide range of inflation rates.