Access

You are not currently logged in.

Access your personal account or get JSTOR access through your library or other institution:

login

Log in to your personal account or through your institution.

The Role of Sticky Prices in an Open Economy DSGE Model: A Bayesian Investigation

Malin Adolfson, Jesper Lindé, Stefan Laséen and Mattias Villani
Journal of the European Economic Association
Vol. 3, No. 2/3, Papers and Proceedings of the Nineteenth Annual Congress of the European Economic Association (Apr. - May, 2005), pp. 444-457
Published by: Wiley on behalf of European Economic Association
Stable URL: http://www.jstor.org/stable/40004987
Page Count: 14
  • Download ($42.00)
  • Subscribe ($19.50)
  • Cite this Item
The Role of Sticky Prices in an Open Economy DSGE Model: A Bayesian Investigation
Preview not available

Abstract

In this paper we use a Dynamic Stochastic General Equilibrium (DSGE) model for an open economy to examine the role of sticky prices in explaining the joint behaviour of inflation and a fairly large set of macroeconomic variables. We find that price stickiness is an important feature for firms active in the domestic, export and import sectors, even though the model embodies variable capital utilisation, a working-capital channel and a time-varying inflation target. We also document that price stickiness in all sectors is important even if the markup shocks are allowed to be autocorrelated, although the implied average contract duration falls substantially under this assumption.

Page Thumbnails

  • Thumbnail: Page 
[444]
    [444]
  • Thumbnail: Page 
445
    445
  • Thumbnail: Page 
446
    446
  • Thumbnail: Page 
447
    447
  • Thumbnail: Page 
448
    448
  • Thumbnail: Page 
449
    449
  • Thumbnail: Page 
450
    450
  • Thumbnail: Page 
451
    451
  • Thumbnail: Page 
452
    452
  • Thumbnail: Page 
453
    453
  • Thumbnail: Page 
454
    454
  • Thumbnail: Page 
455
    455
  • Thumbnail: Page 
456
    456
  • Thumbnail: Page 
457
    457