Karadi, Peter and Reiff, Adam (2007): Menu Costs and Inflation Asymmetries - Some Micro Data Evidence.
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The paper explains the observed asymmetric inflation response to value-added tax (VAT) changes in Hungary by calibrating a standard sectoral menu cost model on a new micro-level CPI data set. The model is able to reproduce important moments of the data, and finds that the asymmetry can be explained by the interaction of menu costs, (sectoral) trend inflation and forward looking firms, thereby it provides direct evidence to the argument of Ball and Mankiw (1994).
|Item Type:||MPRA Paper|
|Original Title:||Menu Costs and Inflation Asymmetries - Some Micro Data Evidence|
|Keywords:||Menu Cost, Inflation Asymmetry, Sectoral Heterogeneity, Value-Added Tax|
|Subjects:||E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E30 - General|
|Depositing User:||Peter Karadi|
|Date Deposited:||11. Feb 2008 08:52|
|Last Modified:||18. Feb 2013 16:34|
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