1 option
Sticky prices : a new monetarist approach / Allen C. Head [and three others].
- Format:
- Book
- Author/Creator:
- Head, Allen C., author.
- Series:
- Working paper series (National Bureau of Economic Research) ; 17520.
- NBER working paper series ; 17520
- Language:
- English
- Subjects (All):
- Prices--Econometric models.
- Prices.
- Physical Description:
- 1 online resource (41 pages) : illustrations.
- Place of Publication:
- Cambridge, Massachusetts : National Bureau of Economic Research, 2011.
- Summary:
- Why do some sellers set nominal prices that apparently do not respond to changes in the aggregate price level? In many models, prices are sticky by assumption; here it is a result. We use search theory, with two consequences: prices are set in dollars, since money is the medium of exchange; and equilibrium implies a nondegenerate price distribution. When the money supply increases, some sellers may keep prices constant, earning less per unit but making it up on volume, so profit stays constant. The calibrated model matches price-change data well. But, in contrast with other sticky-price models, money is neutral.
- Notes:
- Description based on publisher supplied metadata and other sources.
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