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Endogenous Price Stickiness and Business Cycle Persistence Author info | Abstract | Publisher info | Download info | Related research | Statistics Kiley, Michael T
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Sticky prices help generate persistent output fluctuations in response to aggregate demand shocks. This paper develops a model in which price stickiness is endogenous and generates persistent output fluctuations. Since the degree of price stickiness should be lower in high-inflation economies, output persistence should also be lower in high-inflation economies. Estimation of the model, as well as simple autocorrelations of detrended real output, suggest that, indeed, output fluctuations about trend are less persistent in high-inflation economies.
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Article provided by Blackwell Publishing in its journal Journal of Money, Credit and Banking .
Volume (Year): 32 (2000)
Issue (Month): 1 (February)
Pages: 28-53
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Handle: RePEc:mcb:jmoncb:v:32:y:2000:i:1:p:28-53Contact details of provider: Web page: http://www.blackwellpublishing.com/journal.asp?ref=0022-2879
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