Recent studies by Gali and Gertler (1999) and Sbordone (2002) conclude that a theoretical inflation series implied by … the forward-looking New Keynesian pricing model of Calvo (1983) fits post-1960 U.S. inflation closely. Their theoretical … inflation series is conditional on (i) a reduced-form forecasting process for real marginal cost; and (ii) the calibration of …

good approximation of U.S. inflation dynamics. By contrast, if the same estimates are constrained to yield a unique stable …

. The regimes are fully characterized by the mean and variance of inflation and are assumed to be the result of alternative … government policies. Agents are unable to directly observe whether government actions are indeed consistent with the inflation … observations of inflation and money growth. Government announcements are assumed to provide agents with additional, possibly …

prices in Israel over the post-1985 period. Long-run restrictions are used to obtain an interpretation of the effects of … terrorism in terms of aggregate demand and supply curves. The empirical responses of output and prices suggest that the …

, and prices. Based on a dynamic general equilibrium framework, our closed-form solutions reveal that a pure sticky … both types of nominal rigidities is more successful in replicating the empirical evidence about hours, wages and prices …

We develop and estimate a dynamic stochastic general equilibrium model that features sticky prices, a variable … behavior of prices, the model offers an accurate account of the dramatic increase in macroeconomic stability from the Great … Inflation (1948:1-1979:II) to the Great Moderation (1984:I-2006:II). Reminiscent of the evidence in Shapiro and Watson (1988 …