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UID:b17bdc33e2247525f5456e529033a040
CATEGORIES:Seminars
CREATED:20250703T051505
SUMMARY:Lunch Seminar: Saroj Bhattarai -University of Texas at Austin
DESCRIPTION;ENCODING=QUOTED-PRINTABLE:<p><em><strong>Welfare Cost of Inflation in Production Networks</strong></e
 m></p><p>Abstract:</p><p style="text-align: justify;">We study the&nbsp;wel
 fare cost&nbsp;of inflation in a multi-sector&nbsp;sticky price&nbsp;model 
 with&nbsp;production networks. We consider both time- and state-dependent (
 menu cost) pricing models with firm-specific productivity shocks, and match
 &nbsp;sectoral moments of the distribution of price changes in our quantita
 tive exercises. We derive analytical expressions and sufficient statistics 
 for the&nbsp;cost&nbsp;of inflation which illustrate how aggregate producti
 vity and labor supply effects of inflation are determined by the interactio
 n of heterogeneous input-output linkages and price stickiness across sector
 s. A key mechanism is that in a&nbsp;network&nbsp;economy, mis-allocative c
 onsequences of inflation are amplified by input-output linkages as they pro
 pagate across sectors. Quantitatively, even at low to moderate levels of in
 flation, we find that our calibrated production network model&nbsp;amplifie
 s the costs of inflation significantly, around 5-15 times, compared to the 
 one-sector model.</p>
DTSTAMP:20260504T140801Z
DTSTART:20250708T130000Z
DTEND:20250708T140000Z
SEQUENCE:0
TRANSP:OPAQUE
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