Two New Keynesian Theories of Sticky Prices

Roger Farmer

Economics Working Papers from European University Institute

Abstract: This paper compares two alternative theories of Aggregate supply, both with a "New Keynesian Flavor". The first assumes that prices are rigis due to the existence of menu costs of the kind advanced by Mankiw [38] and Akerlof and Yellen [2]. The second derives price stickiness endogenously as one equilibrium in an economy with multiple equilibria.

Keywords: PRICES; ECONOMIC THEORY; MACROECONOMICS (search for similar items in EconPapers)
JEL-codes: E12 E30 (search for similar items in EconPapers)
Pages: 52 pages
Date: 1999
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Journal Article: TWO NEW KEYNESIAN THEORIES OF STICKY PRICES (2000)
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Persistent link: https://EconPapers.repec.org/RePEc:eui:euiwps:eco99/33

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