empirical literature studying the “China shock.” We find that the China shock leads to average welfare increases in most U …

response to an interest shock is found to be too large and no longer hump-shaped in this case. In addition we find that the … response of output to a technology shock can only be reconciled with empirical findings if either the adjustment of the …

We present a new partial equilibrium theory of price adjustment, based on consumer loss aversion. In line with prospect … theory, the consumers' perceived utility losses from price increases are weighted more heavily than the perceived utility … an otherwise standard dynamic neoclassical model of monopolistic competition. The resulting theory of price adjustment is …