NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH
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Aleksei Oskolkov

Department of Economics
University of Chicago
Saieh Hall
1126 E. 59th St.
Chicago, IL 60637

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Institutional Affiliation: University of Chicago

NBER Working Papers and Publications

June 2020The Macroeconomics of Sticky Prices with Generalized Hazard Functions
with Fernando E. Alvarez, Francesco Lippi: w27434
We give a thorough analytic characterization of a large class of sticky-price models where the firm’s price setting behavior is described by a generalized hazard function. Such a function provides a tractable description of the firm’s price setting behavior and allows for a vast variety of empirical hazards to be fitted. This setup is microfounded by random menu costs as in Caballero and Engel (1993) or, alternatively, by information frictions as in Woodford (2009). We establish two main results. First, we show how to identify all the primitives of the model, including the distribution of the fundamental adjustment costs and the implied generalized hazard function, using the distribution of price changes or the distribution of spell durations. Second, we derive a sufficient statistic for ...
 
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