Pricing Behaviour and the Cost-Push Channel of Monetary Policy
This paper examines the empirical and theoretical status of the cost-push channel of monetary policy, according to which interest rates affect the costs of production and hence pricing behaviour. Particular attention is paid to modelling the cost-push channel in a manner consistent with cost-plus pricing theory, which is identified as the canonical model of pricing behaviour in heterodox economics. It is shown that different variants of cost-plus pricing behaviour give rise to qualitatively different specifications of the cost-push channel, with important consequences for macrodynamics and the conduct of monetary policy.
Year of publication: |
2010
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Authors: | Lima, Gilberto Tadeu ; Setterfield, Mark |
Published in: |
Review of Political Economy. - Taylor & Francis Journals, ISSN 0953-8259. - Vol. 22.2010, 1, p. 19-40
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Publisher: |
Taylor & Francis Journals |
Saved in:
Online Resource
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