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http://hdl.handle.net/10419/59465
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| Title: | | Sectoral price facts in a sticky-price model  |
| Authors: | | Carvalho, Carlos Lee, Jae Won |
| Issue Date: | | 2011 |
| Series/Report no.: | | Working Papers, Department of Economics, Rutgers, the State University of New Jersey 2011,33 |
| Abstract: | | We develop a multi-sector sticky-price DSGE model that can endogenously deliver differential responses of prices to aggregate and sectoral shocks. Input-output production linkages induce across-sector pricing complementarities that contribute to a slow response of prices to aggregate shocks. In turn, input-market segmentation at the sectoral level induces within-sector pricing substitutability, which helps the model deliver a fast response of prices to sector-specific shocks. We estimate the model using aggregate and sectoral price and quantity data for the U.S., and find that it accounts extremely well for a range of sectoral price facts. |
| Subjects: | | heterogeneity price stickiness sectoral data FAVAR sectoral shocks |
| JEL: | | E30 E31 E32 |
| Document Type: | | Working Paper |
| Appears in Collections: | | Working Papers, Department of Economics, Rutgers University
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