Are Sticky Prices Costly?

A new paper by two Berkeley economists finds that they are:

Our empirical evidence lends support to the New Keynesian interpretation of the observed nominal price rigidity at the microlevel: sticky prices are costly. Our empirical results are qualitatively and, under plausible calibrations, quantitatively consistent with New Keynesian macroeconomic models where firms have heterogeneous price stickiness. Our “model-free” evidence unambiguously suggests that sticky prices are indeed costly for firms, which is consistent with the tents of New Keynesian macroeconomics.

This is important and interesting. But the true reason I link this is actually because I like the paper’s formatting (I’m serious!) and want to use it as an inspiration for upcoming projects.