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A Unified Framework for Using Micro-Data to Compare Dynamic Time-Dependent Price-Setting Models

โœ Scribed by Dixon, Huw


Book ID
111976069
Publisher
The Berkeley Electronic Press
Year
2012
Tongue
English
Weight
714 KB
Volume
12
Category
Article
ISSN
2194-6116

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โœฆ Synopsis


This paper develops a statistical framework of steady-state identities which enable us to match the distributions of durations found in the micro-data to generalized Taylor and Calvo models of time-dependent pricing. We illustrate the approach with the UK micro CPI data for 1996-2009, and employ the pricing models in a simple macromodel. We find that the Generalized Taylor Economy generates a hump shaped inflation impulse response function, whilst the Generalized Calvo does not.


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