Hidden Bibliographic Details
| Other authors / contributors: | Kumhof, Michael, author.
Parrado, Eric, author.
International Monetary Fund. Asia and Pacific Department.
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| ISBN: | 1281600555
9781281600554
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| Notes: | Includes bibliographical references (pages 23-25).
Restrictions unspecified
Electronic reproduction. [Place of publication not identified] : HathiTrust Digital Library, 2010.
Master and use copy. Digital master created according to Benchmark for Faithful Digital Reproductions of Monographs and Serials, Version 1. Digital Library Federation, December 2002. http://purl.oclc.org/DLF/benchrepro0212
digitized 2010 HathiTrust Digital Library committed to preserve
Print version record.
Online resource; title from PDF title page (IMF, viewed July 5, 2016).
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| Summary: | This paper provides a monetary model with nominal rigidities that differs from the conventional New Keynesian model with firms setting pricing policies instead of price levels. In response to permanent or highly persistent monetary policy shocks this model generates the empirically observed slow (inertial) and prolonged (persistent) reaction of the inflation rate, and also the recession that typically accompanies moderate disinflations. The reason is that firms respond to such shocks mostly through a change in the long-run or inflation updating component of their pricing policies. With staggered pricing policies there is a time lag before this is reflected in aggregate inflation.
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| Other form: | Print version: Céspedes, Luis Felipe. Pricing policies and inflation inertia. [Washington, D.C.] : International Monetary Fund, ©2003
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