scholarly journals Price Rigidities and Relative PPP

2018 ◽  
Author(s):  
Andres Blanco ◽  
Javier Cravino

2020 ◽  
Vol 116 ◽  
pp. 104-116
Author(s):  
Andrés Blanco ◽  
Javier Cravino


2007 ◽  
Vol 28 (6) ◽  
pp. 619-631
Author(s):  
Chris Tsoukis ◽  
Naveed Naqvi
Keyword(s):  




2005 ◽  
Vol 95 (1) ◽  
pp. 255-276 ◽  
Author(s):  
Bhagwan Chowdhry ◽  
Richard Roll ◽  
Yihong Xia

Relative purchasing power parity (PPP) holds for pure price inflations, which affect prices of all goods and services by the same proportion, while leaving relative prices unchanged. Pure price inflations also affect nominal returns of all traded financial assets by exactly the same amount. Recognizing that relative PPP may not hold for the official inflation data constructed from commodity price indices because of relative price changes and other frictions that cause prices to be “sticky,” we provide a novel method for extracting a proxy for realized pure price inflation from stock returns. We find strong support for relative PPP in the short run using the extracted inflation measures.





2009 ◽  
Vol 56 (3) ◽  
pp. 353-364 ◽  
Author(s):  
Robert Amano ◽  
Kevin Moran ◽  
Stephen Murchison ◽  
Andrew Rennison


2018 ◽  
Vol 23 (8) ◽  
pp. 3424-3456 ◽  
Author(s):  
Anna Lipińska ◽  
Leopold von Thadden

This paper examines the effects of fiscal devaluations in a model of a monetary union characterized by national fiscal policies and supranational monetary policy. We show that a revenue-neutral permanent tax shift in one country, which raises its consumption tax to finance a cut to labor taxes, increases welfare of the monetary union in the long run. The distribution of gains among countries depends on their degree of financial integration. We also document that price rigidities result in short-run welfare costs.



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