Mussa puzzle, often viewed as key evidence for monetary non-neutrality, is not due to sticky prices, but due to non-neutrality arising from segmented financial markets resulting in macroeconomic transmission via the risk premium channel https://www.econometricsociety.org/publications/econometrica/forthcoming-papers/0000/00/00/Mussa-Puzzle-Redux/file/20849-4.pdf
Comments