The Price Puzzle Revisited: Can the Cost Channel explain a Rise in Inflation after a Monetary Shock?

Mayer, Eric; Hülsewig, Oliver; Henzel, Steffen und Wollmershäuser, Timo (2006): The Price Puzzle Revisited: Can the Cost Channel explain a Rise in Inflation after a Monetary Shock? Würzburg economic papers,

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.

• Dokumententyp: Paper
• Fakultät: Volkswirtschaft ; Volkswirtschaft > Lehrstühle > Lehrstuhl für Finanzwissenschaft
• Themengebiete: 300 Sozialwissenschaften > 330 Wirtschaft
• Sprache: Englisch