Asymmetric Adjustments of Price and Output

Peter Tinsley and Reva Krieger

Economic Inquiry, 1997, vol. 35, issue 3, 631-52

Abstract: Classical theories predict rapid price adjustments, which are observed in inflationary episodes; Keynesian theories of sticky prices predict sluggish price responses, which are observed in contractions. The authors attempt to reconcile these observations in a model with asymmetries in producer price and output adjustments. Analysis of SIC two-digit industry data indicates production frequently exhibits negative asymmetry--shortfalls from trend are larger than positive deviations--whereas price often displays positive asymmetry. Evidence supporting two rational motives for asymmetric pricing is presented, but causal interactions between output and price asymmetries are not resolved. Copyright 1997 by Oxford University Press.

Date: 1997
References: Add references at CitEc
Citations: View citations in EconPapers (8)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Working Paper: Asymmetric adjustments of price and output (1997)
Working Paper: Asymmetric Adjustments of Price and Output
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:oup:ecinqu:v:35:y:1997:i:3:p:631-52

Ordering information: This journal article can be ordered from
https://academic.oup.com/journals

Access Statistics for this article

Economic Inquiry is currently edited by Preston McAfee

More articles in Economic Inquiry from Western Economic Association International Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK. Contact information at EDIRC.
Bibliographic data for series maintained by Oxford University Press ().