Replication data for: Menu Costs, Aggregate Fluctuations, and Large Shocks
- Karadi, Peter
- Reiff, Adam
AbstractWe document that the aggregate price level responds flexibly and asymmetrically to large positive and negative value-added tax changes. We present a price-setting model with menu costs, trend inflation, and fat-tailed product-level shocks that is consistent with these observations. The model predicts a flexible price-level response to standard monetary policy shocks because it anticipates a large number of firms on the verge of price adjustment and far from their optimal prices when the shock hits.
Is supplement to
DOI: 10.1257/mac.20160054 (Text)
Karadi, Peter, and Adam Reiff. “Menu Costs, Aggregate Fluctuations, and Large Shocks.” American Economic Journal: Macroeconomics 11, no. 3 (July 2019): 111–46. https://doi.org/10.1257/mac.20160054.
- ID: 10.1257/mac.20160054 (DOI)
Update Metadata: 2020-05-18 | Issue Number: 2 | Registration Date: 2019-12-07