Sectoral price facts in a sticky-price model

Arbeitspapier

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.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Paper ; No. 2011-33

Classification and Topics

• Classification: Wirtschaft ; Prices, Business Fluctuations, and Cycles: General (includes Measurement and Data) ; Price Level; Inflation; Deflation ; Business Fluctuations; Cycles
• Subject: heterogeneity ; price stickiness ; sectoral data ; FAVAR ; sectoral shocks

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Carvalho, Carlos ; Lee, Jae Won
• Event: Veröffentlichung
• (who): Rutgers University, Department of Economics
• (where): New Brunswick, NJ
• (when): 2011

Further information

• Handle: http://hdl.handle.net/10419/59465
• Last update: 10.03.2025, 11:44 AM CET