On the Timing of Production Decisions in Monetary Economies

Nejat Anbarci (), Richard Dutu and Ching-jen Sun

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Abstract: In most macroeconomic models inflation tends to be harmful. In this article, we show that by simply changing the timing of production decisions by firms from "on demand" to "in advance," some inflation can boost welfare as long as goods are sufficiently perishable. The main conclusion from this research is that by effectively hiding the strategic interaction between supply and demand, assuming production on demand is not without loss of generality.

Keywords: Timing; Perishability; Production; Money; Inflation; Search (search for similar items in EconPapers)
Date: 2019
New Economics Papers: this item is included in nep-mac
Note: View the original document on HAL open archive server: https://hal.science/hal-02313851v1
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Citations: View citations in EconPapers (3)

Published in International Economic Review, 2019, 60 (1), ⟨10.1111/iere.12359⟩

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Related works:
Journal Article: ON THE TIMING OF PRODUCTION DECISIONS IN MONETARY ECONOMIES (2019)
Working Paper: On the Timing of Production Decisions in Monetary Economies (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-02313851

DOI: 10.1111/iere.12359

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