Faust, Jon; Henderson, Dale W. - 2004
in
the NET or LET camp. Consider a sharp increase in commodity prices. In many
standard models, this shock tends to push … modifications that imply trade-offs. The first is adding a cost shock
to the price-setting equation for the single good as in, for … will be indirect upward pressure on inflation. BLMP conclude that (p.35) “a
supply shock that is great enough or that …