000			02513cam a22003257 4500
001			w14163
003			NBER
005			20211020111736.0
006			m o d
007			cr cnu||||||||
008			210910s2008 mau fo 000 0 eng d
100	1		_aMcCallum, Bennett T.
245	1	0	_aReconsideration of the P-Bar Model of Gradual Price Adjustment / _cBennett T. McCallum.
260			_aCambridge, Mass. _bNational Bureau of Economic Research _c2008.
300			_a1 online resource: _billustrations (black and white);
490	1		_aNBER working paper series _vno. w14163
500			_aJuly 2008.
520	3		_aThis paper compares the P-bar model of price adjustment with the currently dominant Calvo specification. Theoretically, the P-bar model is more attractive as it depends upon adjustment costs for physical quantities rather than nominal prices, while incorporating a one-period information lag. Furthermore, the resulting adjustment relation is more completely free of "money illusion," in terms of dynamic relationships, and therefore satisfies the natural rate hypothesis of Lucas (1972), which is not satisfied by the Calvo model in any of its variants. Along the way, it shows that both the P-bar and Calvo models can be formulated in distinct versions in which current real wages are, or are not, allocative. Quantitatively, for a given calibration of the demand parameters, the implied time series properties of the inflation rate, output gap, and nominal interest rate are determined for various policy parameters, and are compared with quarterly data for the U.S. economy. Neither model dominates but, overall, the comparison seems somewhat more favorable to the P-bar model and certainly does not provide support for the dominant position held by the Calvo model in current monetary policy analysis.
530			_aHardcopy version available to institutional subscribers
538			_aSystem requirements: Adobe [Acrobat] Reader required for PDF files.
538			_aMode of access: World Wide Web.
588	0		_aPrint version record
690		7	_aE30 - General _2Journal of Economic Literature class.
690		7	_aE52 - Monetary Policy _2Journal of Economic Literature class.
710	2		_aNational Bureau of Economic Research.
830		0	_aWorking Paper Series (National Bureau of Economic Research) _vno. w14163.
856	4	0	_uhttps://www.nber.org/papers/w14163
856			_yAcceso en línea al DOI _uhttp://dx.doi.org/10.3386/w14163
942			_2ddc _cW-PAPER
999			_c333960 _d292522