Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/22367 
Year of Publication: 
2006
Series/Report no.: 
W.E.P. - Würzburg Economic Papers No. 74
Publisher: 
University of Würzburg, Department of Economics, Würzburg
Abstract: 
This paper explores whether the cost channel solves the price puzzle. We set-up a New Keynesian DSGE model and estimate it for the euro area by adopting a minimum distance approach. Our findings suggest that - under certain parameter restrictions which are not rejected by the data - the cost channel helps to generate an initial rise of inflation after a monetary contraction.
Subjects: 
Price puzzle
New Keynesian model
cost channel
minimum distance estimation
JEL: 
E32
C51
E31
Document Type: 
Working Paper

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