(S,s) pricing: Does the heterogeneity wipe out the asymmetry on micro level?

Zakaria Babutsidze

No 2010-19, Economics Discussion Papers from Kiel Institute for the World Economy (IfW Kiel)

Abstract: This paper presents a model of asymmetric (S,s) pricing. We investigate whether the asymmetry on micro level is carried over on macro level and what is the role of agent heterogeneity in the process. We look at two kinds of asymmetries: (i) asymmetric output responses monetary shocks and (ii) asymmetric responses to shocks during different phases of business cycle. We conclude that the first type of asymmetry can be attributed to the differences in adjustment bands and that heterogeneity softens this effect. The second type of asymmetry is the result of pricing behavior, thus of agent heterogeneity itself.

Keywords: (S; s) pricing; heterogeneity; asymmetry; four-state shocks (search for similar items in EconPapers)
JEL-codes: E31 E37 (search for similar items in EconPapers)
Date: 2010
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http://www.economics-ejournal.org/economics/discussionpapers/2010-19
https://www.econstor.eu/bitstream/10419/36659/1/631261311.pdf (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifwedp:201019

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