The Real Effects of Inflation in Continuous Versus Discrete Time Sticky Price Models

10 Pages Posted: 17 Aug 2005

See all articles by Wai-Yip Alex Ho

Wai-Yip Alex Ho

Hong Kong Monetary Authority

James Yetman

Bank for International Settlements (BIS)

Date Written: August 2005

Abstract

We compare continuous and discrete time sticky price models. For given menu costs, continuous time models imply shorter average contracts but larger real effects of inflation.

JEL Classification: E31

Suggested Citation

Ho, Wai-Yip Alex and Yetman, James, The Real Effects of Inflation in Continuous Versus Discrete Time Sticky Price Models (August 2005). Available at SSRN: https://ssrn.com/abstract=779865 or http://dx.doi.org/10.2139/ssrn.779865

Wai-Yip Alex Ho

Hong Kong Monetary Authority ( email )

Hong Kong Monetary Authority
55/F, 2 International Finance Centre, 8 Finance St
Central
Hong Kong

James Yetman (Contact Author)

Bank for International Settlements (BIS) ( email )

Centralbahnplatz 2
Basel, Basel-Stadt 4002
Switzerland