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On implications of micro price data for macro models

Bartosz Maćkowiak () and Frank Rafael Smets

No 960, Working Paper Series from European Central Bank

Abstract: We review the recent literature that studies new, detailed micro data on prices. We discuss implications of the new micro data for macro models. We argue that the new micro data are helpful for macro models, but not decisive. There is no simple mapping from the frequency of price changes in micro data to impulse responses of prices and quantities to shocks. We discuss ideas that promise to deliver macro models matching the impulse responses seen in macro data while being broadly in line with micro data. JEL Classification: E3, E5

Keywords: micro price data; models of price setting; real effects of nominal shocks; sticky prices (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba, nep-ecm and nep-mac
Date: 2008-11
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Journal Article: On implications of micro price data for macro models (2008) Downloads
Working Paper: On Implications of Micro Price Data for Macro Models (2008) Downloads
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