Derivation and Estimation of a Phillips Curve with Sticky Prices and Sticky Information

I develop a structural model of inflation by combining two different models of price setting behavior: the sticky price model of the New Keynesian literature and the sticky information model of Mankiw and Reis. In a framework similar to the Calvo model, I assume that there are two types of firms. One type of firm chooses its prices optimally through forward-looking behavior---as assumed in the sticky price model. It uses all available information when deciding on prices. The other type of firm sets its prices under the constraint that the information it uses is ``sticky''---as assumed in the sticky information model. It collects and processes the information necessary to choose its optimal prices with a delay. This leads to the sticky price-sticky information (SP/SI) Phillips curve that nests the standard sticky price and sticky information models. Estimations of this structural model show that both sticky price and sticky information models are statistically and quantitatively important for price setting. However, the sticky price firms make up the majority of the firms in the economy. The resultant SP/SI Phillips curve models inflation better than either the sticky price or sticky information models. The results are robust to alternative sub-samples and estimation methods.Inflation; Phillips Curve; Sticky prices; Sticky information;

Optimal Monetary Policy in the Sticky Information Model of Price Adjustment: Inflation Targeting or Price-Level Targeting?

I investigate optimal monetary policy in the sticky information model of price adjustment within a New Keynesian macroeconomic framework. The model is solved for optimal policy, and welfare implications of three alternative monetary policy regimes: unconstrained policy, price-level targeting and inflation targeting, are compared when there is a shock to the economy. The results for a cost-push shock illustrate that optimal policy depends on the degree of price stickiness and the persistence of the shock. Inflation targeting is the optimal policy if prices are flexible enough or the shock is persistent enough. However, for a demand shock, inflation targeting emerges as the best policy for all values of the price stickiness and the shock's persistence. When the volatility of nominal interest rate is taken into consideration, the results indicate that inflation targeting is the best policy, in the sense that it results in smaller welfare loss and volatility of nominal interest rate, if prices are sticky enough and the persistence of the shock is large enough. However, price-level targeting might be preferable to inflation targeting if prices are more flexible and the relative weight for the volatility of nominal interest rate is large.Optimal policy; Sticky information; Inflation targeting; Price-level targeting

Derivation and Estimation of a Phillips Curve with Sticky Prices and Sticky Information

I develop a structural model of inflation by combining two different models of price setting behavior: the sticky price model of the New Keynesian literature and the sticky information model of Mankiw and Reis. In a framework similar to the Calvo model, I assume that there are two types of firms. One type of firm chooses its prices optimally through forward-looking behavior---as assumed in the sticky price model. It uses all available information when deciding on prices. The other type of firm sets its prices under the constraint that the information it uses is ``sticky''---as assumed in the sticky information model. It collects and processes the information necessary to choose its optimal prices with a delay. This leads to the sticky price-sticky information (SP/SI) Phillips curve that nests the standard sticky price and sticky information models. Estimations of this structural model show that both sticky price and sticky information models are statistically and quantitatively important for price setting. However, the sticky price firms make up the majority of the firms in the economy. The resultant SP/SI Phillips curve models inflation better than either the sticky price or sticky information models. The results are robust to alternative sub-samples and estimation methods

Dynamics of Sticky Information and Sticky Price Models in a New Keynesian DSGE Framework

Recent literature on monetary policy analysis extensively uses the sticky price model of price adjustment in a New Keynesian Macroeconomic framework. This price setting model, however, has been criticized for producing implausible results regarding inflation and output dynamics. This paper examines and compares dynamic responses of the sticky price and sticky information models to a cost-push shock in a New Keynesian DSGE framework. It finds that the sticky information model produces more reasonable dynamics through lagged, gradual and hump-shaped responses to a shock as observed in data. However, these responses depend on the persistence of the shock

Derivation and Estimation of a Phillips Curve with Sticky Prices and Sticky Information

I develop a structural model of inflation by combining two different models of price setting behavior: the sticky price model of the New Keynesian literature and the sticky information model of Mankiw and Reis. In a framework similar to the Calvo model, I assume that there are two types of firms. One type of firm chooses its prices optimally through forward-looking behavior---as assumed in the sticky price model. It uses all available information when deciding on prices. The other type of firm sets its prices under the constraint that the information it uses is ``sticky''---as assumed in the sticky information model. It collects and processes the information necessary to choose its optimal prices with a delay. This leads to the sticky price-sticky information (SP/SI) Phillips curve that nests the standard sticky price and sticky information models. Estimations of this structural model show that both sticky price and sticky information models are statistically and quantitatively important for price setting. However, the sticky price firms make up the majority of the firms in the economy. The resultant SP/SI Phillips curve models inflation better than either the sticky price or sticky information models. The results are robust to alternative sub-samples and estimation methods

Optimal Monetary Policy in the Sticky Information Model of Price Adjustment: Inflation Targeting or Price-Level Targeting?

I investigate optimal monetary policy in the sticky information model of price adjustment within a New Keynesian macroeconomic framework. The model is solved for optimal policy, and welfare implications of three alternative monetary policy regimes: unconstrained policy, price-level targeting and inflation targeting, are compared when there is a shock to the economy. The results for a cost-push shock illustrate that optimal policy depends on the degree of price stickiness and the persistence of the shock. Inflation targeting is the optimal policy if prices are flexible enough or the shock is persistent enough. However, for a demand shock, inflation targeting emerges as the best policy for all values of the price stickiness and the shock's persistence. When the volatility of nominal interest rate is taken into consideration, the results indicate that inflation targeting is the best policy, in the sense that it results in smaller welfare loss and volatility of nominal interest rate, if prices are sticky enough and the persistence of the shock is large enough. However, price-level targeting might be preferable to inflation targeting if prices are more flexible and the relative weight for the volatility of nominal interest rate is large

Dynamics of Sticky Information and Sticky Price Models in a New Keynesian DSGE Framework

Recent literature on monetary policy analysis extensively uses the sticky price model of price adjustment in a New Keynesian Macroeconomic framework. This price setting model, however, has been criticized for producing implausible results regarding inflation and output dynamics. This paper examines and compares dynamic responses of the sticky price and sticky information models to a cost-push shock in a New Keynesian DSGE framework. It finds that the sticky information model produces more reasonable dynamics through lagged, gradual and hump-shaped responses to a shock as observed in data. However, these responses depend on the persistence of the shock

Evaluation of the clinical features of 81 patients with covid-19: An unpredictable disease in children

Objective Data on the prognosis of clinical features of pediatric patients affected by the coronavirus disease 2019 (COVID-19) pandemic is insufficient. This study aimed to examine the clinical, laboratory, and radiology findings of pediatric patients diagnosed with COVID-19. Methods A total of 81 pediatric patients with a confirmed diagnosis of COVID-19 who were admitted to the pediatric clinics of our tertiary care hospital in Istanbul between March 22 and May 1, 2020, were included in the study. Results Of the patients, 40 (49.6%) were boys and 41 (50.6%) were girls. The mean age of the patients was 9.35.5 years (range: 1 month-16 years). The most common symptoms were cough (28.4%) and fever (25.9%). A total of 26 patients (32.1%) had pharyngeal erythema. There was no significant difference between age groups in terms of symptoms, findings, clinical picture, history of contact, and clinical course (p>0.001 for each). Abnormal findings were observed in seven (8.6%) patients on chest X-ray, and in four patients (4.9%) on thorax computed tomography. Only three of the patients were hospitalized and all of them discharged with healing. Conclusion The present study is the most comprehensive study on children diagnosed with COVID-19 in our country, which showed that the COVID-19 picture was mild in pediatric patients, but the signs and symptoms in children were not specific to the disease. Our findings also showed that the rate of asymptomatic infection in children was high and that it was difficult to recognize COVID-19 in children