Sienknecht, Sebastian (2012): Robust policy choice under Calvo and Rotemberg pricing.
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Abstract
This paper examines the robustness of welfare-based policy choices across the nonlinear Calvo and Rotemberg pricing assumptions. Comparisons between simple interest rate rules turn out to be robust and independent of the price dispersion inherent in the Calvo setting. This robustness is violated if there is a policy alternative that controls for price dispersion.
| Item Type: | MPRA Paper |
|---|---|
| Original Title: | Robust policy choice under Calvo and Rotemberg pricing |
| Language: | English |
| Keywords: | Calvo pricing; Rotemberg pricing; welfare analysis; robustness analysis |
| Subjects: | E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E30 - General E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E58 - Central Banks and Their Policies E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E52 - Monetary Policy |
| Item ID: | 38201 |
| Depositing User: | Sebastian Sienknecht |
| Date Deposited: | 19 Apr 2012 12:56 |
| Last Modified: | 27 Sep 2019 13:24 |
| References: | Calvo, G., 1983. Staggered prices in a utility-maximizing framework. Journal of Monetary Economics 12, 383-398. Kahn, A., King, R. G., Wolman, A. L., 2003. Optimal monetary policy. Review of Economic Studies 70, 825-860. Lombardo, G., Vestin, D., 2007. Welfare implications of Calvo vs. Rotemberg pricing assumptions. Economics Letters 100, 275-279. Rotemberg, J., 1982. Monopolistic price adjustment and aggregate output. Review of Economic Studies 49, 517-531. Taylor, J. B., 1993. Discretion versus policy rules in practice. Carnegie-Rochester Conference Series on Public Policy 39, 195-214. Yun, T., 2005. Optimal monetary policy with relative price distortions. American Economic Review 95, 89-109. |
| URI: | https://mpra.ub.uni-muenchen.de/id/eprint/38201 |
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