Title: Price shocks in general equilibrium: alternative specifications
Authors: De Walque, G. ×
Smets, Frank
Wouters, R. #
Issue Date: 2006
Publisher: Oxford University Press
Series Title: CESifo Economic Studies vol:52 issue:1 pages:153-176
Abstract: Smets and Wouters (2003) find that at short- and medium-term horizons stochastic variations in the goods market mark-up are the most important source of inflation variability in the euro area. This article shows that an empirically plausible alternative interpretation is that the estimated price mark-up shocks represent relative price (e.g. productivity) shocks in a flexible-price sector. Such an interpretation is consistent with recent micro findings that prices are very flexible in some sectors such as the food and energy sector, while they are very sticky in other sectors such as services.
ISSN: 1610-241X
Publication status: published
KU Leuven publication type: IT
Appears in Collections:Non-KU Leuven Association publications
× corresponding author
# (joint) last author

Files in This Item:

There are no files associated with this item.

Request a copy


All items in Lirias are protected by copyright, with all rights reserved.

© Web of science