Monetary policy and costs of price adjustment
نویسندگان
چکیده
منابع مشابه
Working Paper Alfred P. Sloan School of Management Monetary Policy and Costs of Price Adjustment Monetary Policy and Costs of Price Adjustment Monetary Policy and Costs of Price Adjustment Helpful Comments and Suggestions
This paper studies the scope for monetary policy in an economy in which firms are concerned by the adverse reaction of their customers to price changes. First, the rational expectations equilibrium of such an economy is computed. Then, it is shown that the preferences of the monetary authority are time inconsistent as long as it can only respond slowly to changing aggregate statistics. The Stro...
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While firms claim to be concerned with consumer reactions to price increases, these often do not cause large reductions in purchases. The model developed here fits this by letting consumers react negatively only when they become convinced that prices are unfair. This can explain price rigidity, though its implications are not identical to those of existing models of costly price adjustment. In ...
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While firms claim to be concerned with consumer reactions to price increases, these often do not cause large reductions in purchases. The model developed here fits this by letting consumers react negatively only when they become convinced that prices are unfair. This can explain price rigidity, though its implications are not identical to those of existing models of costly price adjustment. In ...
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Using a New-Keynesian framework, we investigate how far the inflationary processes in member states of EMU cause regional price levels to converge. We fail to produce hard evidence of the present existence of such an adjustment mechanism, notwithstanding that inflation in some countries tends to converge towards the euro area level. Overall, inflation persistence has declined significantly over...
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We study optimal price setting by a monopolist in an in nite horizon model with stochastic costs, moderate ination, and costly price adjustment. For realistic parameters, chosen to replicate observed frequencies of price changes, the model ts numerically several empirical regularities. In particular, price reductions are larger but less frequent than price increases, and prices respond consid...
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ژورنال
عنوان ژورنال: Journal of Economic Dynamics and Control
سال: 1983
ISSN: 0165-1889
DOI: 10.1016/0165-1889(83)90025-8