Year: 2012
Type: article
Abstract: In this paper, using U.S. as well as French sectoral data and indicators of price rigidity, we reexamine the (lack of) relation between price stickiness and inflation persistence. This has recently been put forward by Bils and Klenow (2004) as evidence against time‐dependent price setting models. We obtain that, when filtering out sector‐specific shocks along the lines of Boivin, Giannoni, and Mihov (2009), and allowing for an alternative assumption on the marginal cost process, the case against the time‐dependent Calvo model is substantially weakened.
Authors: HERVÉ LE BIHAN, JULIEN MATHERON
Institution: Banque de France
Language: English
Domain: Social Sciences
Open Access status: bronze
OpenAlex ID: W3121948903