TY  - JOUR
AU  - Coibion,Olivier
AU  - Gorodnichenko,Yuriy
TI  - Strategic Interaction Among Heterogeneous Price-Setters In An Estimated DSGE Model
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 14323
PY  - 2008
Y2  - September 2008
UR  - http://www.nber.org/papers/w14323
L1  - http://www.nber.org/papers/w14323.pdf
N1  - Author contact info:
Olivier Coibion
640 John Carlyle, #107
Alexandria, VA 22314
Tel: 734-834-3279
E-Mail: ocoibion@gmail.com

Yuriy Gorodnichenko
Department of Economics
530 Evans Hall #3880
University of California, Berkeley
Berkeley, CA 94720-3880
Tel: 510/643-0720
Fax: 510/642-6615
E-Mail: ygorodni@econ.berkeley.edu
AB  - We consider a DSGE model in which firms follow one of four price-setting regimes: sticky prices, sticky-information, rule-of-thumb, or full-information flexible prices. The parameters of the model, including the fractions of each type of firm, are estimated by matching the moments of the observed variables of the model to those found in the data. We find that sticky-price firms and sticky-information firms jointly account for over 80% of firms in the model, with the rest largely accounted for by rule-of-thumb firms. We compare the performance of our hybrid model to pure sticky-price and sticky-information models along various dimensions, including monetary policy implications.
ER  -