Rotemberg NKPC slope problems

General DSGE Modeling
1

Dear Dynare Team,
I have a question. There are two approaches to introducing the rigidity, i.e., Calvo (1983) and Rotemberg (1982). And I don’t konw the slope of NKPC in Rotemberg (1982) as follow:

app.pdf (52.3 KB)

This problem has troubled me many times, Please give me a instruction, Thanks a lot.

My best,
zhenlong.

2

Without the full derivation, it is hard to tell. Maybe your assumptions differ on what the “tax base” of the Rotemberg costs is.