We investigate the possibility of synchronized and staggered equilibria in a version of the Dotsey-King-Wolman state-dependent pricing model. Our paper contributes to a large literature that considers synchronization of price changes (see, for example, Ball and Cecchetti [1988], Ball and Romer...

State-dependent pricing models are now an operational framework for quantitative business cycle analysis. The analysis in Ball and Romer [1991], however, suggests that such models may be rife with multiple equilibria: in their static model price adjustment is always characterized by...

State-dependent pricing models are now an operational framework for quantitative business cycle analysis. The analysis in Ball and Romer [1991. Sticky prices as coordination failure. American Economic Review 81 (3), 539-552], however, suggests that such models may be rife with multiple...

Actions that affect environmental quality both influence and respond to macroeconomic variables. Further, many environmental and macroeconomic consequences of current actions will have uncompensated effects that outlive the actors. This paper presents an overlapping-generations model of...

Inflation targeting is a monetary policy rule that has implications for both the average performance of an economy and its business cycle behavior. We use a modern, rational expectations model to study the twin effects of this policy rule. The model highlights forward- looking consumption and...

In a plain-vanilla New Keynesian model with two-period staggered price-setting, discretionary monetary policy leads to multiple equilibria. Complementarity between the pricing decisions of forward-looking firms underlies the multiplicity, which is intrinsically dynamic in nature. At each point...