Monetary neutrality in one specific class of DGE model with staggered prices

Kirill Sosunov
Authors registered in the RePEc Author Service: Kirill Sossounov ()

Macroeconomics from EconWPA

Abstract: In this paper I show that monetary neutrality proposition holds for one specific parameterization of a dynamic general equilibrium model of monopolistic competition even if nominal rigidity in a form of staggered price setting or partial adjustment price-setting mechanism is present in a model. This parameterization is a result of a zero profit condition for intermediate goods producers and it requires that degree of increasing returns in intermediate goods production is equal to price- marginal costs markup.

Keywords: macroeconomics; business; cycles; staggered; prices (search for similar items in EconPapers)
JEL-codes: L11 C81 F49 R38 (search for similar items in EconPapers)
Date: Written 2001-12-10
Note: Type of Document - MS Word; prepared on IBM PC ; to print on HP/; pages: 10
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