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Firm-Specific Capital, Nominal Rigidities and the Business Cycle / David Altig, Lawrence Christiano, Martin Eichenbaum, Jesper Linde.
- Format:
- Book
- Author/Creator:
- Altig, David.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w11034.
- NBER working paper series no. w11034
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2005.
- Summary:
- Macroeconomic and microeconomic data paint conflicting pictures of price behavior. Macroeconomic data suggest that inflation is inertial. Microeconomic data indicate that firms change prices frequently. We formulate and estimate a model which resolves this apparent micro - macro conflict. Our model is consistent with post-war U.S. evidence on inflation inertia even though firms re-optimize prices on average once every 1.5 quarters. The key feature of our model is that capital is firm-specific and pre-determined within a period.
- Notes:
- Print version record
- January 2005.
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