Saroj Bhattarai, Gauti Eggertsson, and Raphael Schoenle: Is Increased Price Flexibility Stabilizing? Redux: We study the implications of increased price flexibility on output volatility. In a simple DSGE model, we show analytically that more flexible prices always amplify output volatility for supply shocks and also amplify output volatility for demand shocks if monetary policy does … Continue reading Morning Must-Read: Saroj Bhattarai, Gauti Eggertsson, and Raphael Schoenle: Is Increased Price Flexibility Stabilizing? Redux