Firm-specific capital, nominal rigidities and the business cycle
By: David Altig ... [et al.].
Contributors: Altig, David, 1956-; National Bureau of Economic Research.
Series: NBER working paper series -- no. 11034.; Working paper series (National Bureau of Economic Research) -- working paper no. 11034.
Publisher: National Bureau of Economic Research
Published: 2005
Place of publication: Cambridge, Mass
Language: eng
Number of pages: 38
Subjects: Prices -- Econometric models
Description: "Macroeconomic and microeconomic data paint conflicting pictures of price behavior. Macroeconomic data suggest that inflation is inertial. Microeconomic data indicate that firms change prices frequently. We formulate and estimate a model which resolves this apparent micro--macro conflict. Our model is consistent with post-war U.S. evidence on inflation inertia even though firms re-optimize prices on average once every 1.5 quarters. The key feature of our model is that capital is firm-specific and pre-determined within a period"--National Bureau of Economic Research web site.
Notes: "January 2005."

Includes bibliographical references (p. 33-37).

Also available in PDF from the NBER world wide web site (www.nber.org).