Journal of the European Economic Association

Publication date: 2006-01
Pages: 562 - 575
ISSN: 1542-4766, 1542-4774
Publisher: Published by the MIT Press for the European Economic Association

Author:

Angeloni, I
Aucremanne, L ; Ehrmann, M ; Galí, J ; Levin, A ; Smets, Frank

Keywords:

14 Economics, Economics

Abstract:

This paper evaluates new evidence on price-setting practices and inflation persistence in the euro area with respect to its implications for macro modeling. It argues that several of the most commonly used assumptions in micro-founded macro models are seriously challenged by the new findings.