Resource title

The price puzzle revisited: can the cost channel explain a rise in inflation after a monetary policy shock?

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Resource description

This paper explores whether the cost channel solves the price puzzle. We set-up a New Keynesian DSGE model and estimate it for the euro area by adopting a minimum distance approach. Our findings suggest that - under certain parameter restrictions which are not rejected by the data - the cost channel helps to generate an initial rise of inflation after a monetary contraction.

Resource author

Steffen Henzel, Oliver Hülsewig, Eric Mayer, Timo Wollmershäuser

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Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/26084

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Adapt according to the presented license agreement and reference the original author.