Sticky demand – sticky nominal spending – acts as a substitute for sticky prices. In an inventorytheoretic model of the demand for money, monetary injections are offset by endogenous movements in velocity that keep nominal spending flat. When embedded in a sticky price model, this reduces the model

Asymmetric price adjustment Empirical evidence suggests that prices are sticky with respect to cost changes. Moreover, prices respond more rapidly to cost increases than to cost decreases. We develop a search theoretic model which is consistent with this evidence and allows for additional testable

Abstract We propose a microfoundation for sticky prices. We consider a an environment in which a monopolistic firm has better information than its consumers about the nominal aggregate state. We show that, when many consumers are uninformed (and for some ranges of parameters), it is opti

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Understanding the relationship between nominal and real variables, most notably inflation and cyclical output, is one of economics ’ fundamental questions. Towards this understanding, we develop a model that integrates sticky prices and sticky informa-tion, i.e. a dual stickiness model. We find

This paper provides new stylized facts in the price stickiness literature with the introduction of a novel source of micro-price information, called Scraped Data. Scraped data are collected every day from online retailers and have a unique advantage in terms of sampling frequency, accessibility

shocks. We document the effect of macroeconomic fluctuations and sectoral conditions by estimating a factor-augmented vector autoregression using a large set of macroeconomic indicators and disaggregated prices. Our main finding is that disaggregated prices appear sticky in response to macroeconomic

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Welfare-based optimal monetary policy with

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