Standard models used for monetary policy analysis rely on sticky prices. Recently, the literature started to explore also nominal debt contracts. Focusing on mortgages, this paper compares the two channels of transmission within a common framework. The sticky price channel is dominant when...

Despite the relative success of Real Business Cycle (RBC) models to replicate key moments of the business cycles of the US and several European countries, economic research in Latin America is still largely dominated by the more traditional view that monetary factors play a predominant role in...

Cyclical fluctuations in nominal variables|aggregate price levels and nominal interest rates are documented to be substantially more synchronized across countries than cyclical fluctuations in real output. A transparent mechanism that can account for this striking feature of the nominal...