Price-Setting in Mexico and the Real Effects of Monetary Shocks

Kochen Federico

No 2016-21, Working Papers from Banco de México

Abstract: In this paper I use novel micro data underlying the Mexican CPI to establish stylized facts about prices in the Mexican economy. I then analyze the implications and consistency of the empirical results for the degree of monetary non-neutrality generated in both time and state-dependent pricing models. I find that the real effects of monetary shocks importantly depend on the type of nominal rigidity considered and on the treatment of sales in the statistics that are calibrated into the models.

Keywords: Price Micro Data; Price Rigidity; Menu Cost Models (search for similar items in EconPapers)
JEL-codes: E30 E31 E32 (search for similar items in EconPapers)
Date: 2016-12
New Economics Papers: this item is included in nep-hme and nep-mac
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Persistent link: https://EconPapers.repec.org/RePEc:bdm:wpaper:2016-21

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