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dc.contributor.advisorRodríguez Ramos, Carlos A.
dc.contributor.authorAlemar Sánchez, Emanuelle A.
dc.description.abstractThis paper studies the importance and impact of price and wage rigidities on economic fluctuations in Puerto Rico. To this end, a DSGE model with nominal rigidities and monopolistic competition is estimated with macroeconomic data for Puerto Rico. Among the main results, it is estimated that over 79 percent of firms do not readjust their prices at any given period in Puerto Rico, a share that has, on average, been 14 percentage points higher than in the United States. Moreover, prices became more rigid after 2000 during the deflationary period of the recession. This constitutes evidence that firms rarely pass savings from cost reductions to consumers in Puerto Rico by reducing prices, and reduce prices less often, on average, than firms in the United States during periods of economic contraction (when prices would be expected to fall by more due to reduced demand). This has the effect of worsening the magnitude of economic recessions in Puerto Rico, as income falls for firms and individuals while costs remain constant.en_US
dc.rightsAttribution-NonCommercial-NoDerivs 3.0 United States*
dc.subjectEconomic theoryen_US
dc.subject.lcshMacroeconomics--Mathematical models.en_US
dc.subject.lcshRecessions--Puerto Rico.en_US
dc.subject.lcshPuerto Rico--Economic conditions.en_US
dc.titleNominal rigidities and economic fluctuations: The case of Puerto Ricoen_US
dc.rights.holder© 2022 Emanuelle A. Alemar Sánchezen_US
dc.contributor.committeeLara Fontánez, Juan A.
dc.contributor.committeeQuiñones Pérez, Argeo T.
dc.contributor.campusUniversity of Puerto Rico, Río Piedras Campusen_US
dc.description.graduationSemesterSpring (2nd Semester)en_US

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Attribution-NonCommercial-NoDerivs 3.0 United States
Except where otherwise noted, this item's license is described as Attribution-NonCommercial-NoDerivs 3.0 United States