Francesco Lippi

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Are money and credit both essential? We show in a standard model the answer is — no. If credit is easy, money has no role. If credit is tight, money can be valued, but then changes in debt limits are neutral. This is true for any (not only optimal) monetary policy, and whether debt and tax limits are exogenous or endogenous; it can be overturned by(More)
We document the presence of both small and large price changes in individual price records from the CPI in France and the US. After correcting for measurement error and cross-section heterogeneity, the size-distribution of price changes has a positive excess kurtosis. We propose an analytical menu cost model that encompasses several classic accounts for(More)
We study the optimal anticipated policy in a pure-currency economy with flexible prices and a non-degenerate distribution of money holdings. The economy features a business cycle and lump-sum monetary injections have distributional effects that depend on the state of the cycle. We parsimoniously characterize the dynamics of the economy and study the optimal(More)
We study models where prices respond slowly to shocks because firms are rationally inattentive. Producers must pay a cost to observe the determinants of the current profit maximizing price, and hence observe them infrequently. To generate large real effects of monetary shocks in such a model the time between observations must be long and/or highly volatile.(More)
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