OUTPUT EFFECTS OF INFLATION WITH FIXED PRICE- AND QUANTITY-ADJUSTMENT COSTS

Inflation an Asymmetric Price Adjustment

This paper uses a unique micro data set to test for the presence of price asymmetries at the firm level. We find that firm pricing is indeed asymmetric, as Tobin (1972) suggested long ago. Moreover, there is strong evidence to support Ball and Mankiw's (1994) suggestion that firm price asymmetry is dependent on inflation. However, Ball and Mankiw's theory seems to hold better for changes in cos...

On the Output-Inflation Relationship when Price and Quantity Adjustments are Costly

Une vaste littérature analyse les effets réels de coûts d'ajustement des prix en sup-posant que les ajustements de quantités sont sans coûts. Dans ce papier, nous analysons si la présence de coûts d'ajustement des quantités, qui sont probable-ment significatifs, change le résultat traditionnel sur l'impact de l'inflation. En particulier, des résultats récents suggèrent que les coûts d'ajustemen...

Menu Costs and Asymmetric Price Adjustment

We study optimal price setting by a monopolist in an in…nite horizon model with stochastic costs, moderate in‡ation, 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...

"^-^^-^-^ Overview and Quantity Competition with Large Fixed Costs

Scale Economies with Regard to Price Adjustment Costs and the Speed of Price Adjustment in Australian Manufacturing

The standard quadratic price adjustment cost function makes no allowance for firm size or for scale economies. Incorporating quadratic price adjustment costs into the profit function, a firm’s speed of price adjustment is both shown to be a positive/negative function of its size when firms have scale economies/diseconomies with regard to these costs and to be a negative function of market power...