Dotsey, Michael; King, Robert G.; Wolman, Alexander L. - In: The Quarterly Journal of Economics 114 (1999) 2, pp. 655-690
Economists have long suggested that nominal product prices are changed infrequently because of fixed costs. In such a setting, optimal price adjustment should depend on the state of the economy. Yet, while widely discussed, statedependent pricing has proved difficult to incorporate into...