Publication: On staggered prices and optimal inflation
Consultable a partir de
Date
2019
Director
Publisher
Acceso abierto / Sarbide irekia
Documento de trabajo / Lan gaia
Project identifier
MINECO//ECO2015-64330-P/ES/
Abstract
This paper computes the steady-state optimal rate of inflation assuming two different sticky-price specifications, Calvo (1983) and Taylor (1980), in a model with monopolistic competition. The optimal rate of inflation in steady state is always positive. This result is robust to changes in the degree of price stickiness. In both cases of staggered prices, the optimal rate of inflation is approximately equal to the ratio between the rate of discount and the Dixit-Stiglitz elasticity.
Description
Keywords
Monopolistic competition, Sticky prices, Optimal inflation
Department
Ekonomia / Institute for Advanced Research in Business and Economics - INARBE / Economía
Faculty/School
Degree
Doctorate program
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