Sticky Information Versus Sticky Prices: A Proposal to Replace the New Keynesian Phillips Curve
نویسندگان
چکیده
This paper examines a model of dynamic price adjustment based on the assumption that information disseminates slowly throughout the population. Compared to the commonly used sticky-price model, this sticky-information model displays three related properties that are more consistent with accepted views about the effects of monetary policy. First, disinflations are always contractionary (although announced disinflations are less contractionary than surprise ones). Second, monetary policy shocks have their maximum impact on inflation with a substantial delay. Third, the change in inflation is positively correlated with the level of economic activity. * We are grateful to Alberto Alesina, Marios Angeletos, Laurence Ball, William Dupor, Martin Eichenbaum, Chris Foote, Xavier Gabaix, Mark Gertler, Bennett McCallum, Ken Rogoff, Julio Rotemberg, Michael Woodford, and anonymous referees for comments on an earlier draft. Reis is grateful to the Fundacao Ciencia e Tecnologia, Praxis XXI, for financial support.
منابع مشابه
Sticky information and model uncertainty in survey data on inflation expectations
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