The price puzzle revisited: Can the cost channel explain a rise in inflation after a monetary policy shock?

Steffen Henzel, Oliver Hülsewig and Eric Mayer

Munich Reprints in Economics from University of Munich, 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.

Date: 2009
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Citations: View citations in EconPapers (60)

Published in Journal of Macroeconomics 2 31(2009): pp. 268-289

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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? (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:lmu:muenar:19421

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