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A Peer-reviewed scientific articles/A1 Journal article (refereed), original research
      
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Calvo vs. Rotemberg in a trend inflation world: An empirical investigation, Journal of Economic Dynamics and Control 35, 11, November (2011). Castelnuovo, Efrem; Ascari, Guido; Rossi, Lorenzo


Category A Peer-reviewed scientific articles
Sub-category A1 Journal article (refereed), original research
auki Internal authors
Ascari Guido / Research
Castelnuovo Efrem / Research
All authors as text Castelnuovo, Efrem; Ascari, Guido; Rossi, Lorenzo 
Number of authors
Status Published
Year of publication 2011 
Date 15.11.2011 
Name of article Calvo vs. Rotemberg in a trend inflation world: An empirical investigation 
Name of journal Journal of Economic Dynamics and Control
Volume 35, 11, November 
Pages 1852-1867 
Abstract This paper estimates and compares New-Keynesian DSGE monetary models of the business cycle derived under two different pricing schemes—Calvo (1983) and Rotemberg (1982)—under a positive trend inflation rate. Our empirical findings (i) support trend inflation as an empirically relevant feature of the U.S. great moderation; (ii) provide evidence in favor of the statistical superiority of the Calvo setting; (iii) point to a substantially lower degree of price indexation under Calvo. We show that the superiority of the Calvo model is due to the restrictions imposed by such a pricing scheme on the aggregate demand equation.
Free text descriptor in English Calvo, Rotemberg, trend inflation, Bayesian estimations 
JEL-codes C32; E3; E52 
ISSN / e-ISSN 0165-1889 
auki Internet addresses
Notes Available online 12 June 2011