Reviving Micro Real Rigidities: The Importance of Demand Shocks

The views expressed here are those of the authors and not necessarily those of the Federal Reserve Bank of Atlanta, the Federal Reserve System, or the National Bureau of Economic Research. The authors are grateful for the invaluable feedback they received on an earlier draft from Jón Steinsson. The authors would like to thank Nir Jaimovich (editor) and four anonymous referees, as well as Isaac Baley, Mark Bils, Laura Castillo-Martínez (discussant), Basile Grassi, Susanto Basu, John Haltiwanger, Pete Klenow, Francesco Lippi, Virgiliu Midrigan, Tobias Renkin, Luminita Stevens, Javier Turén, Rosen Valchev, and seminar participants at the NBER 2024 SI (ME), UC Berkeley, Boston College, the University of Maryland, the Federal Reserve Board of Governors, the Federal Reserve Banks of Atlanta, Boston, Chicago, and Richmond, ITAM, IMF, Banque de France, BIS, Bocconi, EIEF, CREI, the University of Iowa, Georgetown University, PUC-Chile, Michigan State University, the European Central Bank, the Deutsche Bundesbank, the European University Institute, North Carolina State University, City University of Hong Kong, and Shanghai University of Finance and Economics for useful comments and suggestions. Any remaining errors are the authors’ responsibility.

• May 29, 2024
• January 21, 2025