Serie: Documentos de Trabajo. 0306.
Autor: Pedro Pablo Álvarez Lois.
Documento completo
Resumen
This paper presents a model featuring variable utilization rates across firms due to production inflexibilities and idiosyncratic demand uncertainty. Within a New Keynesian framework, we show how the corresponding bottlenecks and stock-outs generate asymmetries in the transmission mechanism of monetary policy. We derive an expression for the Phillips curve where the dynamics of inflation depend on real marginal costs and on a measure of resource underutilization.