Sticky Information Versus Sticky Prices: A Proposal to Replace the New Keynesian Phillips Curve

N. Gregory Mankiw and Ricardo Reis

No 8290, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper examines a model of dynamic price adjustment based on the assumption that information disseminates slowly throughout the population. Compared to the commonly used sticky-price model, this sticky-information model displays three, related properties that are more consistent with accepted views about the effects of monetary policy. First, disinflations are always contractionary (although announced disinflations are less contractionary than surprise ones). Second, monetary policy shocks have their maximum impact on inflation with a substantial delay. Third, the change in inflation is positively correlated with the level of economic activity.

JEL-codes: E0 E3 (search for similar items in EconPapers)
Date: 2001-05
Note: EFG ME
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (143)

Published as Mankiw, N. Gregory and Ricardo Reis. "Sticky Information Versus Sticky Prices: A Proposal To Replace The New Keynesian Phillips Curve," Quarterly Journal of Economics, Nov. 2002, v117(4): 1295-1328
Published as N. Gregory Mankiw & Ricardo Reis, 2001. "Sticky information versus sticky prices: a proposal to replace the New-Keynesian Phillips curve," Proceedings, Federal Reserve Bank of San Francisco, issue Jun.

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Journal Article: Sticky Information versus Sticky Prices: A Proposal to Replace the New Keynesian Phillips Curve (2002)
Working Paper: Sticky Information Versus Sticky Prices: A Proposal to Replace the New Keynesian Phillips Curve (2002)
Journal Article: Sticky information versus sticky prices: a proposal to replace the New-Keynesian Phillips curve (2001)
Working Paper: Sticky Information Versus Sticky Prices: A Proposal to Replace the New Keynesian Phillips Curve (2001)
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