In this paper, I developed a new cost channel of monetary policy transmission in a small scale, dynamic, general equilibrium model. The new cost channel of monetary policy transmission implies that the frequency of price adjustment increases in the nominal interest rate. I found that allowing...

Models in which pricing decisions depend on indexing or rule of thumb behaviour have become prominent in the monetary policy literature and tend to match macroeconomic data well given their prediction of inflation persistence. The extent to which firms index their prices to past inflation has...

Purpose This paper aims to provide an overall review and assessment of the virtues and flaws of decentralized self-regulated markets, discussing in particular the extent to which deceiving attitudes by some market participants might be potentially diluted and contradicted....