Research
Publications
Optimal normalization policy under behavioral expectations
Journal of Monetary Economics, Vol. 153, 103786, July 2025.
Published Version / Revised draft / Original DNB Working Paper version
Working Papers
Nominal Rigidities and Monetary Policy in the Euro Area
Latest version / Earlier version: CEPR Discussion Paper (“Monetary Policy in the Euro Area, when Phillips Curves … are Curves”)
Presentation video: International Research Forum on Monetary Policy, Young Economist Session
+ Abstract
We study monetary policy in a nonlinear New Keynesian model with state-dependent price- and wage-adjustment frequencies. The extensive margin of nominal adjustment makes shock propagation sign-, size-, and state-dependent. Inflationary shocks generally increase firms' incentives to reprice, whereas wage reoptimization responds only when shocks sufficiently affect desired real wages and labor-market conditions. Estimating the model on euro area data from 1999Q1 to 2024Q4, we find a pronounced price-wage asymmetry. During the 2021–2022 surge, price adjustment increased sharply, while wage inflation mainly reflected delayed real-wage catch-up. Consequently, monetary policy could reduce inflation at lower output cost.
Policy Analysis
Report on monetary policy tools, strategy and communication / Workstream 2
ECB Occasional Paper No. 372, 2025.
Selected Work in Progress
Monetary policy counterfactuals in non-linear environments
Winds of trade wars
Behavioral learning equilibria in a bond market with asset purchases