منابع مشابه
Linking Individual and Aggregate Price Changes
Standard macroeconomic forecasting indicators and techniques tend to perform poorly in predicting inflation in the short-run. The present paper shows that microeconomic price data placed in an empirical model rooted in (S,s) pricing theory convey extra information on inflation dynamics. The empirical model designed to capture the deviation between target and actual price, potentially applicable...
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We accomplish two tasks to characterize aggregate price stickiness in this paper. First, we endogenize β, the fraction of the firms keeping their price unchanged following a money supply shock in the near-rationality model (Akerlof and Yellen, 1985) by introducing a distribution of price-adjustment barriers among the firms into the near-rationality model. Second, as β can be considered an indic...
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In an in nite horizon model with stochastic costs, moderate ination, costly price adjustment, and optimal price setting, we demonstrate that individual price reductions will be larger but less frequent than price increases. With positive ination, aggregate prices are more responsive to cost increases than to cost decreases, and a calibrated version of the model ts well the magnitude of downw...
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We derive a measure of firm speed of price adjustment that is directly inversely related to market power and compare this to the measure derived by Martin (1993). However, both measures are incorrect when firms have non-zero price conjectural variations and treat competing price levels as exogenous. This is because Taylor series expansions of the demand function implicitly assume that firms inf...
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ژورنال
عنوان ژورنال: Brookings Papers on Economic Activity
سال: 1987
ISSN: 0007-2303
DOI: 10.2307/2534514