The State-Dependent Effects of Monetary Policy: Calvo versus Rotemberg

Hayk Kamalyan

MPRA Paper from University Library of Munich, Germany

Abstract: This paper evaluates state-dependence in monetary policy transmission mechanism under Calvo and Rotemberg price adjustment schemes. Although the two models are equivalent to first order, they produce very different results once considered at a higher order. In particular, the Rotemberg model produces more state-dependence compared to the Calvo model. The result is reversed once the macroeconomic wedges are eliminated from the models.

Keywords: State-Dependence; Calvo; Rotemberg; Monetary Policy (search for similar items in EconPapers)
JEL-codes: E30 E32 E50 E52 (search for similar items in EconPapers)
Date: 2021-04-02
New Economics Papers: this item is included in nep-cba, nep-dge, nep-mac and nep-mon
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:107490

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