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• W2108021284 abstract "Most of the papers in the sticky-price literature are based on a log-linearization around the zero inflation steady state, a simplifying but counterfactual assumption. This paper shows that when trend inflation is considered, both the long-run and the short-run properties of DGE models based on the Calvo staggered price model change dramatically. It follows that results obtained by models log-linearized around a zero inflation steady state are quite misleading. Furthermore, the same is not true for models based on the Taylor staggered price model, which is robust to changes in trend inflation. As a conclusion, the Taylor model is to be preferred, unless one is willing to index nominal variables." @default.
• W2108021284 created "2016-06-24" @default.
• W2108021284 creator A5062331021 @default.
• W2108021284 date "2004-07-01" @default.
• W2108021284 modified "2023-09-27" @default.
• W2108021284 title "Staggered prices and trend inflation: some nuisances" @default.
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• W2108021284 doi "https://doi.org/10.1016/j.red.2004.01.002" @default.
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