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## A monetary policy shock will have more persistent effects under Calvo price-setting than under Taylor price-setting”

The result for calvo has to be this when deriving you have to get to

λ calvo= ρ+(1- ρ)^2(1-γ ) λ1 Calvo /1- ρλ1 Calvo

Use notation from lecture notes

I said not to copy previous writers work cause is mostly wrong, he had mostly put all the work of previous writers and just changed few words and is still wrong answer, not even tried to include the monetary policy in the equations, like I explained

specification of monetary policy in terms of either an objective function or a rule for setting the nominal rate of interest is needed, they don’t even obviously understand what that means

it means to include the rule for setting up the interest rate in the equations, by including the additional equation of the rule and then substituting it for both models, to find the effect of the shocks in the two models…. There is no what I is equal to …..+e    which is the shock, it shpws they don’t understand what they have to do at all. Neither they have tried to express it as a function of money supply change, which also has to be shown mathematically obviously degree of persistence is different has to be shown over time how is different, mathematically, that’s why all derivations are needed to get to that first both models have to be solved, derivations is needed to how nominal variables have impact on the real variables, more persistent effect on output and inflation under Calvo than Taylor, have to derive an expression for output and prices as a function of money supply. to find how the price level and output evolve over time, given the behaviour of money supply do both models of price rigidity imply similar dynamic responses of output to monetary
shocks in a standard dynamic general equilibrium (DGE) economy, also this has to be shown mathematically how ouput and inflation evolves over time for both models, to see the persistence. IT HASN’T BEENN SHOWN ANYWAHERE, THE EVOLUTION OF OUTPUT AND INF. OVER TIME GIVEN the specific form of money supply

To show the effect of monetary shock , and then to do that over time,has to be SHOWN mathematically and then explained intuitively NOT like the last writer who has copied a After derivations write Impulse response function, this is just stating a result of a paper. to answer the question specification of monetary policy to then plug it in price setting equation ho see the effects, to see the impulse response function it has to derived to be seen overall persistance and the difference in the persistance has to be shown they haven’ t even included in the monetary policy shock in the models,
how a question for advance macro can be asnwered if they don’t show how the monetary shock( the unforeseen change in the interest rate) effect the variables in the price setting models mathematically and then explain over time meaning that time paths of both models, given the equation for monetary policy rule interest rate, has to be plugged in in the models, after, to show what would be the effect of this interest rate shock, monetary policy shock, do not confuse models with mark-up shock and all these previous stuff showing they have no idea what the question asks.