The relationship between inventory investment and the real interest rate has been difficult to assess empirically. Recent work has proposed a linear-quadratic inventory model with time-varying discount factor to identify the effects of the real interest rate on inventory investment. The authors...

The autoregressive distributed lag model (ARDL), even though it distinguishes between the short run and the long run effect, allows both the intercepts and slopes to vary across countries. Static panel estimations, such as fixed-effects estimation (FE), cannot distinguish between the short run...

Mankiw and Reis (2002) have proposed a 'sticky-information'-based Phillips curve (SIPC) to address some of the concerns with the 'sticky-price'-based new Keynesian Phillips curve. In this paper, we present a methodology to empirically implement the SIPC and estimate its key structural...

Sticky price models based on menu costs predict that countries with high trend inflation should have (i) smaller impact effects of demand shocks on output and (ii) less persistent output fluctuations, relative to low-trend inflation countries. These predictions are tested, controlling for...