This paper compares the P-bar model of price adjustment with the currently dominant Calvo specification. Theoretically, the P-bar model is more attractive as it depends on adjustment costs for physical quantities rather than nominal prices, while incorporating a one-period information lag....

The United States is almost alone among industrial countries in having no monetary standard. It has, that is, no institutionalized guarantee or even explicit objective concerning the purchasing power of its money. Between 1971 and 1990, this was true of most industrial countries but since then...

We construct a measure of Euro area cyclical effficiency, following the approach developed in Galí, Gertler and López-Salido (2002).Our measure -wich we call “the gap”- corresponds to the inverse of price over social marginal cost. Here we present a time series of this gap for the Euro...