Intangible Capital, Returns to Scale and Aggregate Price Stickiness

Zhiyong An

Annals of Economics and Finance, 2025, vol. 26, issue 1, 377-388

Abstract: Intangible capital has become a large and increasingly important part of firms' capital stocks, especially over the last three decades. A common premise in the literature on intangible capital is that it can contribute to higher returns to scale. In this article, we study the impact of rising intangible capital on aggregate price stickiness via the channel of returns to scale in New Keynesian economics. Our basic methodology is to base on An (2009, 2022) to do a comparative static analysis regarding returns to scale. We show that the impact is theoretically ambiguous thanks to strategic complementarity (Cooper and John, 1988). Our analysis suggests that fiscal and monetary policies can re- spond to the rising intangible capital by varying and coordinating their impact on aggregate price stickiness to stabilize the economy.

Keywords: Aggregate Price Stickiness; Intangible Capital; Returns to Scale (search for similar items in EconPapers)
JEL-codes: E3 E5 (search for similar items in EconPapers)
Date: 2025
References: View complete reference list from CitEc
Citations:

Downloads: (external link)
http://down.aefweb.net/AefArticles/aef260109An.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cuf:journl:y:2025:v:26:i:1:an

Access Statistics for this article

Annals of Economics and Finance is currently edited by Heng-fu Zou

More articles in Annals of Economics and Finance from Society for AEF Contact information at EDIRC.
Bibliographic data for series maintained by Qiang Gao ().