Econometrica: Mar, 2006, Volume 74, Issue 2

Aggregation and Optimization with State‐Dependent Pricing: A Comment

https://doi.org/10.1111/j.1468-0262.2006.00672.x
p. 565-573

Vladislav Damjanovic, Charles Nolan

A key argument in Caplin and Leahy (1997) states that the correlation between monetary shocks and output is falling in the variance of the money supply. We demonstrate that this conclusion depends on solving for the correlation in the nonstationary state of the model. In the stationary state, that correlation is initially rising.

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July 5, 2026

New Monograph Editor Announced

Serena Ng stepped down as Coeditor of the Monograph Series on June 30, 2026. On July 1st, Peter Arcidiacono became the new Coeditor responsible for theoretical and applied econometrics.

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