The paper by Julio J. Rotemberg, titled "Sticky Prices in the United States," published in March 1981, explores the phenomenon of price stickiness in the U.S. economy. The author argues that previous empirical studies on price stickiness have lacked a formal theoretical framework, leading to interpretations that are difficult to interpret. Rotemberg presents a theoretical model where firms incur costs when changing prices, which leads to price stickiness. The model is estimated using post-war U.S. data and tested against alternative hypotheses. The results support the model's predictions, indicating that prices are indeed sticky in the U.S. economy. The paper also tests the hypothesis that prices are not sticky, which is rejected by the data. Additionally, the paper discusses the implications of the model for the behavior of relative prices, output, and the price level, providing testable predictions that can be compared with empirical data.The paper by Julio J. Rotemberg, titled "Sticky Prices in the United States," published in March 1981, explores the phenomenon of price stickiness in the U.S. economy. The author argues that previous empirical studies on price stickiness have lacked a formal theoretical framework, leading to interpretations that are difficult to interpret. Rotemberg presents a theoretical model where firms incur costs when changing prices, which leads to price stickiness. The model is estimated using post-war U.S. data and tested against alternative hypotheses. The results support the model's predictions, indicating that prices are indeed sticky in the U.S. economy. The paper also tests the hypothesis that prices are not sticky, which is rejected by the data. Additionally, the paper discusses the implications of the model for the behavior of relative prices, output, and the price level, providing testable predictions that can be compared with empirical data.