Aggregation and the PPP Puzzle in a Sticky-Price Model

We study the purchasing power parity (PPP) puzzle in a multisector, two-country, sticky-price model. Sectors differ in the extent of price stickiness, leading to heterogeneous sectoral real exchange rate dynamics. Deviations from PPP are more volatile and persistent than in an otherwise identical on...

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Veröffentlicht in:	The American economic review 2011-10, Vol.101 (6), p.2391-2424
Hauptverfasser:	Carvalho, Carlos, Nechio, Fernanda
Format:	Artikel
Sprache:	eng
Schlagworte:	Aggregation Central banks Contrafactuals Economic models Economic theory Exchange rates Financial models Foreign exchange rates Global economy International economics Modeling Price changes Price levels Price rigidities Purchasing power parity Real exchange rates Real rigidities Sticky prices Studies U.S.A Volatility World economy
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