Recitation 4: Alternative Specications for Price Setting
نویسنده
چکیده
The nature of the price setting process directly a¤ects the form of the derived Phillips curve. This handout covers 2 models which have been quite inuential in the monetary policy literature. The rst is the Rotemberg (1982, then 1996) model of price-setting subject to quadratic adjustment costs. The second model is the recent contribution of Mankiw and Reis (2002) which replaces sticky prices with sticky information.
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