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Spatiotemporal inflation dynamics in response to a monetary policy shock

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  • Orlando Gomes

Abstract

This note characterizes the adjustment of the inflation rate towards a new steady-state, in response to a monetary policy shock. The sluggish nature of the adjustment is the straightforward outcome of the type of information dissemination one considers. Namely, firms will be grouped in clusters, and it will be assumed that information spreads faster within than between clusters.

Suggested Citation

  • Orlando Gomes, 2013. "Spatiotemporal inflation dynamics in response to a monetary policy shock," Economics and Business Letters, Oviedo University Press, vol. 2(2), pages 54-65.
    • Handle: RePEc:ove:journl:aid:9897
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    File URL: https://reunido.uniovi.es/index.php/EBL/article/view/9897
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    References listed on IDEAS

    as
    1. Orlando Gomes & Vivaldo M. Mendes, 2011. "Sluggish information diffusion and monetary policy shocks," Economics Bulletin, AccessEcon, vol. 31(2), pages 1275-1287.
    2. N. Gregory Mankiw & Ricardo Reis, 2002. "Sticky Information versus Sticky Prices: A Proposal to Replace the New Keynesian Phillips Curve," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 117(4), pages 1295-1328.
    3. Robert E. Lucas, 2009. "Ideas and Growth," Economica, London School of Economics and Political Science, vol. 76(301), pages 1-19, February.
    4. Blanchard, Olivier Jean & Kiyotaki, Nobuhiro, 1987. "Monopolistic Competition and the Effects of Aggregate Demand," American Economic Review, American Economic Association, vol. 77(4), pages 647-666, September.
    5. Dmitriev, Mikhail & Comin, Diego & Rossi-Hansberg, Esteban, 2012. "The Spatial Diffusion of Technology," CEPR Discussion Papers 9208, C.E.P.R. Discussion Papers.
    6. Isidoro Romero & Francisco Javier Santos, 2007. "Firm Size and Regional Linkages: A Typology of Manufacturing Establishments in Southern Spain," Regional Studies, Taylor & Francis Journals, vol. 41(5), pages 571-584.
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