Price Stickiness, Inflation, and Output Dynamics: A Cross-Country Analysis

Hashmat Khan ()

Staff Working Papers from Bank of Canada

Abstract: The sticky-price model of aggregate fluctuations implies that countries with high trend inflation rates should exhibit less-persistent output fluctuations than countries with low trend inflation. I conduct a cross-country analysis of output persistence and inflation that takes into account the within-country time variation in trend inflation. My results do not support the implication. The results suggest that further research is needed before models based on nominal price stickiness can offer a complete microfoundation for persistent effects of aggregate demand shocks.

Keywords: Business; fluctuations; and; cycles (search for similar items in EconPapers)
JEL-codes: C13 E41 (search for similar items in EconPapers)
Pages: 56 pages
Date: 2000
New Economics Papers: this item is included in nep-ets and nep-mon
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:bca:bocawp:00-13

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