A unifed framework for understanding and comparing dynamic wage and price setting models

Arbeitspapier

This paper argues that the cross-sectional approach to durations is essential to understand nominal rigidity because this captures the fact that price-spells are generated by firms' price-setting behavior. Since the distribution of durations is dominated by a proliferation of short contracts, the cross-sectional measure corrects for this by length-biased sampling. Modelling the price-spell durations in this way enables us to see how Taylor, Calvo and their generalizations relate to each other, and enable us to compare price-setting behavior for a given distribution of durations. We also show how the micro-data can be directly related to the macroeconomic pricing models in this setting.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Cardiff Economics Working Papers ; No. E2009/20

Classification and Topics

• Classification: Wirtschaft ; Monetary Policy, Central Banking, and the Supply of Money and Credit: General
• Subject: price-spell ; steady state ; hazard rate ; Calvo ; Taylor ; Preisrigidität ; Lohnrigidität ; Stationäre Volkswirtschaft ; Preistheorie ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Dixon, Huw David
• Event: Veröffentlichung
• (who): Cardiff University, Cardiff Business School
• (where): Cardiff
• (when): 2009

Further information

• Handle: http://hdl.handle.net/10419/65749
• Last update: 10.03.2025, 11:46 AM CET