Implications of Microeconomic Price Data for Macroeconomic Models

  title={Implications of Microeconomic Price Data for Macroeconomic Models},
  author={Bartosz Mackowiak and Frank R. Smets},
We review the recent literature that studies new, detailed microeconomic data on prices. We discuss implications of these data for macroeconomic models. We argue that these data are helpful for macroeconomic models, but not decisive. There is no simple mapping from the frequency of price changes in microeconomic data to impulse responses of prices and quantities to shocks. We discuss ideas that promise to deliver macroeconomic models matching the impulse responses seen in aggregate data while… CONTINUE READING

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