This paper uses a unique micro data set to test for the presence of price asymmetries at the firm level. We find that firm pricing is indeed asymmetric, as Tobin (1972) suggested long ago. Moreover, there is strong evidence to support Ball and Mankiw's (1994) suggestion that firm price asymmetry is dependent on inflation. However, Ball and Mankiw's theory seems to hold better for changes in cos...

This paper develops a stochastically-based method of measuring core inflation. The approach exploits the persistent tendency towards high kurtosis evident in the cross-sectional distribution of consumer price changes evident in New Zealand and elsewhere. High kurtosis makes the sample mean a less efficient and less robust estimator of the population, or underlying, mean price change than is an ...

The New-Keynesian Phillips curve is usually reported to fit the data better when lagged inflation, and therefore backward-looking price setting, is included in the equation. We argue that the same inflation persistence can be generated by letting the shocks in the economy be highly correlated in a model where price setting is purely forward-looking. Previous estimates in the literature are bias...

We compare macroeconomic models of sticky-prices (Calvo and Costsof-adjustment) with flexible price models in terms of optimal seigniorage. This sheds light on the importance of relative price distortions. Sticky-price models with no price dispersion terms have unattractive implications, we argue, when it comes to the derivation of optimal policies. We provide examples where they may imply very...

IIn recent years, policymakers have generally relied on regulatory policies to address financial stability concerns. However, our understanding of these policies and their efficacy in curbing housing prices is limited. In this paper, we examine the impact of three regulatory tools i.e. LTV (loan to value) ratio, reserve requirement rate (RR), and capital adequacy ratio (CAR) on housing price in...

Empiricaf models of commodity prices are potentially important aids to decision-makers, especially as the economy has grown more complex. A typicrd time series of commodity prices exhibks positive autocorrelation, occasional spikes, and random variability, and conceptual models have been developed to explain this behavior. But, the leap from theory to empirical applications is large because of ...

this paper estimates the determinants of inflation in iran using a linear and non- linear regression model over the period 1959-2008. in the model specification, the conventional variables (liquidity, production and exchange rate) as well as positive and negative oil revenue shocks, monetary disequilibrium, and demand gap are considered. the results show that nonlinear time series regression mo...

This paper attempts to evaluate the magnitude of the influence of relative price shifts on the overall inflation in Poland during the period of 1989 to 1997. For that purpose, the theoretical model has been employed that predicts a positive relationship between variance and skewness of the distribution of relative price changes and the general inflation rate. Regressions performed in the framew...

P rice-level stability is widely recognized as the principal goal of monetary policy (see, for example, Black 1990, Carlstrom and Gavin 1991, and Hoskins 1991). A program for price stability actually has two distinct objectives; achieving each objective has its own distinct benefits. The first objective is to reduce the expected rate of price inflation to zero. The second objective is to elimin...