Co-authors: Eugene Oue, Felipe Saffie & Jonathan Willis
Affiliation: University of Maryland
Date and time: Wednesday, April 15, 2026 14:30 (Santiago, GMT-04:00)
Location (Hybrid Seminar):

• Auditorio atthe Central Bank of Chile, Morandé 115, second floor.
• Online meeting

Registration: seminarios@bcentral.cl

Abstract: We revisit micro real rigidities as a source of monetary non-neutrality in a menu-cost model with variable markups, using firm-level evidence to pin down key primitives. We embed a non-CES demand system in a quantitative monetary model and use firm-dynamics evidence to identify demand curvature and firm-level productivity and demand processes. The calibrated model matches untargeted micro pricing moments, the markup distribution, and cost pass-through, while generating comparable non-neutrality. The key innovation is an empirically supported placement of idiosyncratic demand shocks that shifts residual demand, thereby moving desired markups and prices under non-CES demand. The broader implication is that this calibrated model provides a portable framework linking monetary economics with trade and IO evidence.