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Inflation and output dynamics with state-dependent nominal rigidities
(Centro de Investigación y Docencia Económicas, División de Economía, 2008)
The paper shows that in a natural extension of Calvo pricing that endogenizes the degree of nominal rigidities, the pricing scheme delivers a generalized New Keynesian Phillips (NKPC). In the NKPC of the model, current ...
State-dependent nominal rigidities & disinflation programs in small open economies
(Centro de Investigación y Docencia Económicas, División de Economía, 2008)
Experiences of high-inflation economies suggest that exchange rate-based (ERB) and money-based (MB) disinflations induce sharply different dynamics in consumption and GDP. I study the role of nominal rigidities to explain ...