Welfare implications of Calvo vs. Rotemberg-pricing assumptions

This paper compares the welfare implications of two widely used pricing assumptions in the New-Keynesian literature: Calvo-pricing vs. Rotemberg-pricing. We show that despite the strong similarities between the two assumptions to a first order of approximation, in general they might entail different welfare costs at higher order of approximation.

MoreLess

Year of publication:	2008
Authors:	Lombardo, Giovanni ; Vestin, David
Published in:	Economics Letters. - Elsevier, ISSN 0165-1765. - Vol. 100.2008, 2, p. 275-279
Publisher:	Elsevier

More details

Type of publication:	Article
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005275581