The Price Puzzle Revisited: Can the Cost Channel Explain a Rise in Inflation after a Monetary Policy Shock?

Steffen Henzel, Oliver Hülsewig, Eric Mayer and Timo Wollmershäuser

No 2039, CESifo Working Paper Series from CESifo

Abstract: This paper explores whether the cost channel solves the price puzzle. We set-up a New Keynesian DSGE model and estimate it for the euro area by adopting a minimum distance approach. Our findings suggest that - under certain parameter restrictions which are not rejected by the data - the cost channel helps to generate an initial rise of inflation after a monetary contraction.

Keywords: price puzzle; New Keynesian model; cost channel; minimum distance estimation (search for similar items in EconPapers)
JEL-codes: C51 E31 E32 (search for similar items in EconPapers)
Date: 2007
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (24)

Downloads: (external link)
https://www.cesifo.org/DocDL/cesifo1_wp2039.pdf (application/pdf)

Related works:
Journal Article: The price puzzle revisited: Can the cost channel explain a rise in inflation after a monetary policy shock? (2009)
Working Paper: The price puzzle revisited: Can the cost channel explain a rise in inflation after a monetary policy shock? (2009)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_2039

Access Statistics for this paper

More papers in CESifo Working Paper Series from CESifo Contact information at EDIRC.
Bibliographic data for series maintained by Klaus Wohlrabe (wohlrabe@ifo.de).