Can a DSGE Model Explain a Costly Disinflation?

Maria Ferrara and Patrizio Tirelli

No 306, Working Papers from University of Milano-Bicocca, Department of Economics

Abstract: This paper shows that a medium-scale DSGE model is able to explain a contemporaneous reduction of output and consumption during a disinflation policy, as it is in the empirical evidence. To this aim, we introduce Rotemberg (1982) adjustment costs and the limited asset market participation assumption.

Keywords: Disináation; Rotemberg price adjustment; Monetary Policy (search for similar items in EconPapers)
JEL-codes: E31 E5 (search for similar items in EconPapers)
Pages: 16
Date: 2015-08, Revised 2015-08
New Economics Papers: this item is included in nep-dge, nep-ger, nep-mac and nep-mon
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Persistent link: https://EconPapers.repec.org/RePEc:mib:wpaper:306

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