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Real Rigidities and Nominal Price Changes

Bibliographic Data

ID9725426
AuthorsPeter J Klenow (Department of Economics Stanford University, SIEPR and NBER), Jonathan L Willis (Federal Reserve Bank of Kansas City)
Year2016
Volume83
Issue331
Pages443-472
Publication date2016-07-01
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueEconomica (JOURNAL)
Journal identifiersISSN: 0013-0427 • E-ISSN: 1468-0335
PublisherWiley (PUBLISHER • GB)
DOI10.1111/ecca.12191
OpenAlexW2340307213
LanguageEN
Citations received11
References cited38

Real rigidities can help to generate persistent effects of monetary policy shocks. We analyse an industry equilibrium model with two types of real rigidities: a ‘micro’ real rigidity from a kinked demand curve, and a ‘macro’ real rigidity due to sticky intermediate prices. We estimate key model parameters using micro data from the US CPI, which features big movements in relative prices within and across sectors. The micro real rigidity necessitates large idiosyncratic shocks to productivity. The macro real rigidity does not entail such large idiosyncratic shocks, and is consistent with the volatility of sectoral TFP growth

Econometrics · Economic impact analysis · Economics · Macro · Macroeconomics · Micro level · Microeconomics · Monetary economics · Monetary policy · Productivity · Relative price · Rigidity (electromagnetism) · Total factor productivity · Volatility (finance) · Computer Science · Economic theories and models · Economic Theory and Policy · Monetary Policy and Economic Impact

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Unique citing works11
Citations per year0,58
Citation span2007 - 2025 (19)
Citation velocityrecent
Highly citedNo
Citation typesNeutral: 10

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