Topic: Transmission of monetary policy

  1. Real Effects of Price Stability with Endogenous Nominal Indexation

    Working Paper 2009-16 - Césaire Meh, Vincenzo Quadrini, Yaz Terajima

    We study a model with repeated moral hazard where financial contracts are not fully indexed to inflation because nominal prices are observed with delay as in Jovanovic & Ueda (1997). More constrained firms sign contracts that are less indexed to the nominal price and, as a result, their investment is more sensitive to nominal price [...]

    Topics: Economic models; Financial markets; Monetary policy framework; Transmission of monetary policy
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