New evidence on inflation persistence and price stickiness in the euro area: implications for macro modelling
Angeloni, I. × Aucremanne, L. Ehrmann, M. Galí, J. Levin, A. Smets, Frank #
Published by the MIT Press for the European Economic Association
Journal of the European Economic Association vol:4 issue:2-3 pages:562-575
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.