An equilibrium analysis of relative price changes and aggregate inflation

被引:22
作者
Balke, NS [1 ]
Wynne, MA
机构
[1] So Methodist Univ, Dept Econ, Dallas, TX 75275 USA
[2] Fed Reserve Bank Dallas, Dept Res, Dallas, TX 75201 USA
关键词
relative prices; inflation; cross-section distribution of prices;
D O I
10.1016/S0304-3932(99)00051-3
中图分类号
F8 [财政、金融];
学科分类号
0202 ;
摘要
Inflation is positively correlated with the variability of relative prices as measured by the standard deviation of the cross-section distribution of prices, and also with the third moment (skewness) of the cross-section distribution of prices. The conventional interpretation of these relationships is that they reflect sluggishness in the adjustment of individual prices in response to shocks. In this paper we question this interpretation. First, we show that similar correlations among the moments exist in alternative measures of underlying technology shocks. Second, when these shocks are fed into a general equilibrium model with multiple sectors and flexible prices, the resulting prices also display a positive correlation between aggregate inflation and skewness of the cross-section distribution. (C) 2000 Elsevier Science B.V. All rights reserved.
引用
收藏
页码:269 / 292
页数:24
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