In models with sticky prices and monopolistic competition, the cyclical behavior of real marginal cost is a key determinant of firms' pricing decisions. Necessarily then, such behavior is closely linked to the corresponding cyclical behavior of inflation. Recent empirical work on this link...

Early empirical studies of the New Keynesian Phillips Curve imply implausibly high levels of price stickiness for standard monetary models with Calvo-type nominal rigidities. More recently researchers have found that the addition of real rigidities through firm-specific capital adjustment costs...

I reconcile macro- and micro-evidence on price setting in a search and matching framework. Search frictions lead price-setting firms to negotiate wage rates with their employees. In contrast to the existing macro-labor literature, I assume that wage-bargaining and price-setting occur in the same...

Wavelets are a useful analytical tool to study economic decisions on different times scales. Wavelets are particular types of function that are localized both in time and frequency domain and used to decompose a function f(x) (i.e. a signal, a surface, a series, etc..) into more elementary...

After the presentation of the Phillips curve as an empirical regularity (Phillips 1958 ) economists and policy makers alike have tried to exploit it for policy purposes. Even before the oil shocks in the seventies and early eighties this has had mixed success only. With the advent of...

We connect two major strands of the recent monetary policy literature, i) the search for well microfounded optimising models consistent with macroeconomic data, especially persistence in inflation, and ii) the wealth of newly available microeconomic data on price changing behaviour from the...

The recent works of Gali and Gertler (1999) and Gali, Gertler, and Lopez-Salido (2001) provided evidence supporting the NKPC for the United States and the euro area. However, several econometric problems have been discussed in the literature on the empirical relevance of their results (among...