• Media type: Report; E-Book
  • Title: Understanding inflation persistence: a comparison of different models
  • Contributor: Dixon, Huw [Author]; Kara, Engin [Author]
  • Published: Frankfurt a. M.: European Central Bank (ECB), 2006
  • Language: English
  • Keywords: Inflationstheorie ; Vergleich ; Preisrigidität ; Persistence ; DGE models ; E17 ; Theorie ; Dynamisches Gleichgewicht ; inflation ; price-setting ; E3
  • Origination:
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  • Description: This paper adopts the Impulse-Response methodology to understand inflation persistence. It has often been argued that existing models of pricing fail to explain the persistence that we observe. We adopt a common general framework which allows for an explicit modelling of the distribution of contract lengths and for different types of price setting. In particular, we find that allowing for a distribution of contract lengths can yield a more plausible explanation of inflation persistence than indexation.
  • Access State: Open Access