CGE Model with price stickiness

Problems with modeling
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Baud1094
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CGE Model with price stickiness

Post by Baud1094 » 6 days ago

Hello everyone. You are well I hope. I programmed CGE models to analyze the impact of rising oil and food prices on the economy. My problem arises at the level of the non-rigidity of prices. Indeed the simulations show the impact in the first period but from the second period the impact dissipates suddenly and the economy returns to normal. I presented the results the results and one of the criticisms was that I should integrate the pricing rigidity because the economy must recover gradually and not all at once. Could you give me some guidance on how to insert price stickiness into my model?

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