State-Dependent Pricing And The General Equilibrium Dynamics Of Money And Output
Robert G. King () and
Alexander L. Wolman ()
The Quarterly Journal of Economics, 1999, vol. 114, issue 2, pages 655-690
Economists have long suggested that nominal product prices are changed infrequently because of fixed costs. In such a setting, optimal price adjustment should depend on the state of the economy. Yet, while widely discussed, statedependent pricing has proved difficult to incorporate into macroeconomic models. This paper develops a new, tractable theoretical state-dependent pricing framework. We use it to study how optimal pricing depends on the persistence of monetary shocks, the elasticities of labor supply and goods demand, and the interest sensitivity of money demand. © 2000 the President and Fellows of Harvard College and the Massachusetts Institute of Technology
References: Add references at CitEc
Citations View citations in EconPapers (297) Track citations by RSS feed
Downloads: (external link)
http://www.catchword.com/cgi-bin/cgi?ini=bc&body=l ... 990501)114:2L.655;1- (text/html)
Access to full text is restricted to subscribers.
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: http://EconPapers.repec.org/RePEc:tpr:qjecon:v:114:y:1999:i:2:p:655-690
Ordering information: This journal article can be ordered from
http://mitpress.mit. ... me.tcl?issn=00335533
Access Statistics for this article
The Quarterly Journal of Economics is edited by Robert J. Barro, Edward L. Glaeser and Lawrence F. Katz
More articles in The Quarterly Journal of Economics from MIT Press
Series data maintained by Karie Kirkpatrick ().