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

Eric Mayer, Oliver Hülsewig, Steffen Henzel and Timo Wollmershäuser

No 74, W.E.P. - Würzburg Economic Papers from University of Würzburg, Department of Economics

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: 2006
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/22367/1/wep74.pdf (application/pdf)

Related works:
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:zbw:wuewep:74

Access Statistics for this paper

More papers in W.E.P. - Würzburg Economic Papers from University of Würzburg, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().