Menu costs, (s,S) rule, imperfect information and the neutrality of money
Franck Portier ()
Economics Bulletin, 2004, vol. 5, issue 7, 1-8
A dynamic macroeconomic model of monopolistic competition and imperfect information with menu costs and (s,S) pricing rule is proposed, in the lines of Caballero and Engel . The model can be seen as an imperfect competition version of Lucas  with menu costs. The presence of informational imperfection destroys the neutrality result of Caplin and Spulber , and the effect of a monetary shock on output is shown to be an increasing function of the degree of strategic complementarity between firms.
JEL-codes: E3 (search for similar items in EconPapers)
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