Irrespective of the actual policy preferences or reforms across the globe, the structural issue of financial regulation has recently gained attention for several reasons. First, the growth of financial sector is characterised by the blurring of distinction between banking, securities and insurance activities.
How high and how persistent does inflation need to be for the frequency of price changes to increase significantly? How would this affect the strength of the selection effect? And could real rigidities become weaker, for example because real wages adjust faster or price-setters pay more attention to inflation?