Published Classic Review of Economic Dynamics Published Apr 2011Firm-specific capital, nominal rigidities and the business cycleDavid Altig · Lawrence J. Christiano · Martin Eichenbaum · Jesper LindéEstimated New Keynesian models reconcile inertial inflation with Calvo pricing only by forcing firms to re-optimise prices once every two years or more, which micro price data contradict. Making …