Abstract We study monetary transmission in a model of state-dependent prices and wages based on ‘control costs’. Stickiness arises because precise choice is costly: decision makers tolerate errors both the timing adjustments, new level at which price or wage set. The calibrated to microdata size frequency changes. In our simulations, money shocks have less persistent real effects than Calvo framework; nonetheless, exhibits substantial degree non-neutrality, driven mainly by rigidity....

We study the effects of monetary shocks in a model state-dependent price and wage adjustment based on “control costs”. Suppliers retail goods labor are both monopolistic competitors that face idiosyncratic productivity nominal rigidities. Stickiness arises because precise decisions costly, so agents choose to tolerate small errors timing adjustments. Our simulations calibrated microdata size frequency changes. Money have less persistent real our than they would time-dependent framework, but...

We study the effects of monetary shocks in a model state-dependent price and wage adjustment based on “control costs”. Suppliers retail goods labor are both monopolistic competitors that face idiosyncratic productivity nominal rigidities. Stickiness arises because precise decisions costly, so agents choose to tolerate small errors timing adjustments. Our simulations calibrated microdata size frequency changes. Money have less persistent real our than they would time-dependent framework, but...

Abstract This article quantifies the aggregate effects of firing costs in a model firm dynamics where firm-level productivity is determined by innovation. In model, distribution endogenous, and thus, potentially affected policy changes, allowing to capture both static (allocative efficiency) dynamic (changes firms’ productivity) costs. The calibrated match key features hiring behavior using data from Spanish nonfinancial firms. I show that equivalent 2.5 monthly wages produce 4% loss...