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Nonuniform Staggered Prices and Output Persistence

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  • JOHAN SÖDERBERG

Abstract

Staggered prices are a fundamental building block of New Keynesian dynamic stochastic general equilibrium models. In the standard model, prices are uniformly staggered, but recent empirical evidence suggests that deviations from uniform staggering are common. This paper analyzes how synchronization of price changes affects the response to monetary policy shocks. I find that even large deviations from uniform staggering have small effects on the response of output. Aggregate dynamics in a model of uniform staggering may serve well as an approximation to a more complicated model with some degree of synchronization in price setting.

Suggested Citation

  • Johan Söderberg, 2013. "Nonuniform Staggered Prices and Output Persistence," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 45(6), pages 1017-1044, September.
    • Handle: RePEc:wly:jmoncb:v:45:y:2013:i:6:p:1017-1044
    DOI: 10.1111/jmcb.12042
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    Cited by:

    1. Söderberg, Johan, 2015. "Seasonality in the Frequency of Price Change and Optimal Monetary Policy," Research Papers in Economics 2015:11, Stockholm University, Department of Economics.

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    More about this item

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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