Nominal Rigidities and the Dynamic Effects of a Shock to Monetary Policy
Open accessAbstract
We present a model embodying moderate amounts of nominal rigidities that accounts for the observed inertia in inflation and persistence in output. The key features of our model are those that prevent a sharp rise in marginal costs after an expansionary shock to monetary policy. Of these features, the most important are staggered wage contracts that have an average duration of three quarters and variable capital utilization.
Integrity signals
Registry
Cites
Statistics
Claims the paper makes
Claims other papers make about this one
Each is checked against this paper’s own text: does it say what the citing paper says it does?
The authors propose a design for LLM-driven social generative agents deeply rooted in theories from psychology, economics, and behavioral science.
“Therefore, we propose a design for LLM-driven social generative agents, deeply rooted theories from psychology (e.g. Maslow's Hierarchy of Needs [71] and Theory of Planned Behavior [5]), economics (e.g., Dynamic Stochastic General Equilibrium [25]), and behavioral science (e.g., Gravity Model [122]).”
From AgentSociety: Large-Scale Simulation of LLM-Driven Generative Agents Advances Understanding of Human Behaviors and Society (2025) · cites this paper as [25]
The authors designed a framework for LLM-driven social agents following social theories from psychology, economics, and behavioral science.
“Specifically, following social theories from a broad range of fields, including psychology [71, 5], economics [25] and behavioral sciencel [122], we first design a framework for LLM-driven social agents.”
From AgentSociety: Large-Scale Simulation of LLM-Driven Generative Agents Advances Understanding of Human Behaviors and Society (2025) · cites this paper as [25]
Cited by
Sorted by citations
Estimation and Inference of Impulse Responses by Local Projections
Jordà, Ò. (2005) · American Economic Review · doi:10.1257/0002828053828518 · Cited by 4,677 · see citing works
A Fiscal Theory of Persistent Inflation
Bianchi, F., Faccini, R., & Melosi, L. (2023) · The Quarterly Journal of Economics · doi:10.1093/qje/qjad027 · Cited by 116 · see citing works
EconAgent: Large Language Model-Empowered Agents for Simulating Macroeconomic Activities
Li, N., Gao, C., Li, M., Li, Y., & Liao, Q. (2024) · Proceedings of the 62nd Annual Meeting of the Association for Computational Linguistics (Volume 1: Long Papers) · doi:10.18653/v1/2024.acl-long.829 · Cited by 59 · see citing works
“Later, Dynamic Stochastic General Equilibrium (DSGE) models (Christiano et al., 2005) were introduced to capture economic dynamics and shocks but assumed a perfect world.”
BackgroundMethodTokenomics: Dynamic adoption and valuation
Cong, L. W., Li, Y., & Wang, N. (2021) · The Review of Financial Studies · doi:10.1093/rfs/hhaa089 · Cited by 58 · see citing works
Piao, J., Yan, Y., Zhang, J., Li, N., Yan, J., Lan, X., Lu, Z., Zheng, Z., Wang, J. Y., Zhou, D., et al. (2025) · doi:10.2139/ssrn.5954414 · Cited by 43 · see citing works
Piao, J., Yan, Y., Zhang, J., Li, N., Yan, J., Lan, X., Lu, Z., Zheng, Z., Wang, J. Y., Zhou, D., et al. (2025) · arXiv · doi:10.48550/arxiv.2502.08691 · Cited by 43 · see citing works
“…we propose a design for LLM-driven social generative agents, deeply rooted theories from psychology (e.g. Maslow’s Hierarchy of Needs [68] and Theory of Planned Behavior [5]), economics (e.g., Dynamic Stochastic General Equilibrium [25]), and behavioral science (e.g., Gravity Model [118]).”
- Authors
- Christiano, L. J., Eichenbaum, M., & Evans, C. L.
- Affiliations
- Northwestern University (US)
- Federal Reserve Bank of Chicago (US)
- ORCID
- Evans, Charles L.
- Venue
- Journal of Political Economy
- Publisher
- University of Chicago Press
- Published
- 2005-02
- Volume
- 113
- Issue
- 1
- Pages
- 1-45
- ISSN
- 0022-3808 (ISSN-L)
- 1537-534X
- OpenAlex
- W3121293400
- Cited by
- 6,238
- References
- 0
- Citations by year
- 2026: 189 · 2025: 253 · 2024: 250 · 2023: 238 · 2022: 224 · 2021: 262 · 2020: 311 · 2019: 246 · 2018: 312 · 2017: 288 · 2016: 299 · 2015: 235 · 2014: 334 · 2013: 335 · 2012: 345
- FWCI
- 536.47
- Type
- journal article
- Language
- en
- Open access
- green
- doi.org
- Locations
- Journal of Political Economy (publishedVersion)
- SSRN Electronic Journal (acceptedVersion)
- RePEc: Research Papers in Economics (submittedVersion)
- Topics
- Social Sciences › Economics, Econometrics and Finance › General Economics, Econometrics and Finance › Monetary Policy and Economic Impact
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Economic theories and models
- Social Sciences › Economics, Econometrics and Finance › General Economics, Econometrics and Finance › Economic Theory and Policy
- Keywords
- nominal rigidities, monetary policy shocks, inflation inertia, output persistence, capital utilization, marginal cost, New Keynesian model, dynamic effects
About these checks
Registry, retraction, Cites and statistics results are computed, not judged, with one exception: a printed reference that no index lists is read once by a model before it counts as a citation error. Claims are extracted by a model and kept only when their quote appears verbatim in the text; each cited source is then checked, with a model’s help, for whether it says what the claim relies on. Those verdicts can be wrong — read the claim’s quote and the cited source before relying on one.
Statistics and arithmetic are recomputed, not judged.
Confidence bands are shown only for fields calibrated on our annotated test set. None is calibrated yet, so no band is shown.
What counts as a claim ›How we measure confidence ›How we check this ›
Are you an author, or do you see a problem with this page? Request a review
