Are Prices Sticky? A Study On Lithuanian Macro Data
(2010) NEKM06 20102Department of Economics
- Abstract
- In this essay, the degree of price rigidity was evaluated on Lithuanian macro data. For this purpose, a Calvo-type sticky price optimizing agent model was employed as theoretical background, guiding to the New Keynesian Phillips Curve (NKPC). The results of econometric analysis revealed, that real marginal costs do drive short-run inflation in Lithuania if unit labor costs are employed as a proxy. The average time between price changes based on structural estimation results was obtained equal from three to seven quarters depending on model specification as well as assumption about real marginal costs. Hence, the implication was drawn that there is a strong macro data based evidence of the degree of price stickiness during the time period... (More)
- In this essay, the degree of price rigidity was evaluated on Lithuanian macro data. For this purpose, a Calvo-type sticky price optimizing agent model was employed as theoretical background, guiding to the New Keynesian Phillips Curve (NKPC). The results of econometric analysis revealed, that real marginal costs do drive short-run inflation in Lithuania if unit labor costs are employed as a proxy. The average time between price changes based on structural estimation results was obtained equal from three to seven quarters depending on model specification as well as assumption about real marginal costs. Hence, the implication was drawn that there is a strong macro data based evidence of the degree of price stickiness during the time period from 1996Q4 to 2009Q4. (Less)
Please use this url to cite or link to this publication:
http://lup.lub.lu.se/student-papers/record/1699067
- author
- Norkute, Milda LU
- supervisor
- organization
- course
- NEKM06 20102
- year
- 2010
- type
- H1 - Master's Degree (One Year)
- subject
- keywords
- Sticky prices, Calvo-type model, NKPC, GMM
- language
- English
- id
- 1699067
- date added to LUP
- 2010-12-13 08:59:14
- date last changed
- 2010-12-13 08:59:14
@misc{1699067, abstract = {{In this essay, the degree of price rigidity was evaluated on Lithuanian macro data. For this purpose, a Calvo-type sticky price optimizing agent model was employed as theoretical background, guiding to the New Keynesian Phillips Curve (NKPC). The results of econometric analysis revealed, that real marginal costs do drive short-run inflation in Lithuania if unit labor costs are employed as a proxy. The average time between price changes based on structural estimation results was obtained equal from three to seven quarters depending on model specification as well as assumption about real marginal costs. Hence, the implication was drawn that there is a strong macro data based evidence of the degree of price stickiness during the time period from 1996Q4 to 2009Q4.}}, author = {{Norkute, Milda}}, language = {{eng}}, note = {{Student Paper}}, title = {{Are Prices Sticky? A Study On Lithuanian Macro Data}}, year = {{2010}}, }