![Models of price setting and inflation dynamics](/f/webbe/Secciones/Publicaciones/PublicacionesSeriadas/DocumentosOcasionales/documentosocasionales.png)
Series: Occasional Papers. 2416.
Author: James Costain and Anton Nakov.
Full document
Summary
We review models of nominal price adjustment based on optimizing or near-optimal behavior, including menu cost models, generalized hazard function models and models of frictional decisions. We also discuss the role of real rigidities and assess the models’ success in explaining retail microdata and inflation dynamics.