On Endogenously Staggered Prices

V Bhaskar

Macroeconomics from University Library of Munich, Germany

Abstract: 064 Taylor's model of staggered contracts is an influential explanation for nominal inertia and the persistent real effects of nominal shocks. However, in standard imperfect competition models, if agents are allowed to choose the timing of pricing decisions, they will typically choose to synchronize. This paper provides a simple model of imperfect competition which produces stable staggering. Our argument relies on strategic interaction at two levels --- between firms within an industries, and across industries --- and produces a continuum of stable staggered price equilibria.

Keywords: Staggered contracts; monopolistic competition; coordination failures (search for similar items in EconPapers)
JEL-codes: E32 E52 (search for similar items in EconPapers)
Date: 1998-09-15
Note: Type of Document - Tex; prepared on IBM PC ; to print on any;
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Citations: View citations in EconPapers (8)

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Journal Article: On Endogenously Staggered Prices (2002)
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