Is inflation sticky?

Article Abstract:

A normal rigidity model, inspired by Taylor's (1979,1980) principles, is used to analyze the nature and costs of inflation in the US. Results highlighted that inflation is not sticky, contradicting assumptions provided by the new Keynesian sticky-price models. It was also revealed that standard models with less than perfectly rational inflation expectations are more elaborate in evaluating the effects of inflation to real variables such as employment and production output. These models have substantial applications in policy analysis.

Administration of General Economic Programs, Currency Stabilization Programs, Employment, Prices, Monetary policy, Currency stabilization

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Public sector price increases, credibility and welfare

Article Abstract:

Credibility plays a vital role in determining the effectiveness of a price reform. A price reform is said to be credible when it results to deflation and public welfare enhancement. Such positive effects are observed even in situations in which the reaction of labor market is very slow. Multiple self-fulfilling equilibria results when government inverses a reform due to high inflation.

Economics, Research and Development in the Social Sciences and Humanities, Labor market, Government marketing

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