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Strategic inattention, inflation dynamics, and the non-neutrality of money
Afrouzi, Hassan - 2020
How does competition affect information acquisition of firms and thus the response of inflation and output to monetary policy shocks? This paper addresses these questions in a new dynamic general equilibrium model with both dynamic rational inattention and oligopolistic competition. In the...
Persistent link: https://www.econbiz.de/10012200269
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Monetary policy and nominal rigidities under low inflation
Holden, Steinar - 2001
In most European countries, money wages are given in collective agreements or individual employment contracts, and the employer cannot unilaterally cut wages, even after the expiration of a collective agreement. Ceteris paribus, workers have a stronger bargaining position when they try to...
Persistent link: https://www.econbiz.de/10011398859
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A theory of price adjustment under loss aversion
Ahrens, Steffen; Pirschel, Inske; Snower, Dennis J. - 2014
We present a new partial equilibrium theory of price adjustment, based on consumer loss aversion. In line with prospect … theory, the consumers' perceived utility losses from price increases are weighted more heavily than the perceived utility … an otherwise standard dynamic neoclassical model of monopolistic competition. The resulting theory of price adjustment is …
Persistent link: https://www.econbiz.de/10010354159
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Price change synchronization within and between firms
Nilsen, Øivind Anti; Skuterud, Håvard; Munthe-Kaas … - 2021
-firm synchronization is found supporting the theory of economies of scope in menu costs. The industry synchronization effects are found to …
Persistent link: https://www.econbiz.de/10012612687
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Financial constraints and nominal price rigidities
Balleer, Almut; Hristov, Nikolay; Menno, Dominik - 2017
This paper investigates how financial market imperfections and the frequency of price adjustment interact. Based on new firm-level evidence for Germany, we document that financially constrained firms adjust prices more often than their unconstrained counterparts, both upwards and downwards. We...
Persistent link: https://www.econbiz.de/10011597241
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State-dependent or time-dependent pricing? : new evidence from a monthly firm-level survey: 1980-2017
Dixon, Huw; Grimme, Christian - 2019
We take a monthly panel of German firms over the period 1980−2017 to examine the relative importance of time and state dependence in the decisions of firms to raise, lower or leave their price constant. In addition, we seek to estimate the relative importance of macroeconomic factors and...
Persistent link: https://www.econbiz.de/10012103943
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Optimal trend inflation
Adam, Klaus; Weber, Henning - 2018
Sticky price models featuring heterogeneous firms and systematic firm-level productivity trends deliver radically different predictions for the optimal inflation rate than their popular homogenous-firm counterparts: (1) the optimal steady-state inflation rate generically differs from zero and...
Persistent link: https://www.econbiz.de/10011845313
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Price rigidity and the origins of aggregate fluctuations
Pasten, Ernesto; Schoenle, Raphael; Weber, Michael - 2018 - This version: August 2018
We document a novel role of heterogeneity in price rigidity: It strongly amplifies the capacity of idiosyncratic shocks to drive aggregate fluctuations. Heterogeneity in price rigidity also completely changes the identity of sectors from which fluctuations originate. We show these results both...
Persistent link: https://www.econbiz.de/10011891743
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Monetary policy, price setting, and credit constraints
Balleer, Almut; Zorn, Peter - 2019
We estimate the effects of monetary policy on price-setting behavior in administrative micro data underlying the German producer price index. We find a strong degree of monetary nonneutrality. After expansionary monetary policy, the mass of additional price adjustments is economically small and...
Persistent link: https://www.econbiz.de/10012138873
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Pass-through of cost-push shocks
Gödl-Hanisch, Isabel; Menkhoff, Manuel - 2023
This paper examines the pass-through of cost-push shocks to customers at a granular level. Using unique firm-level survey data, we document five facts about pass-through across firms, sectors, and over time. We highlight a new channel relevant for pass-through: beliefs about the expected...
Persistent link: https://www.econbiz.de/10014306740