This paper uses Taylor's model of overlapping contracts to show that increased wage and price flexibility can easily be … prices decreases output. Simulations based on realistic parameter values suggest that increases in price flexibility might …

This paper presents evidence on the amount of price rigidity that exists in individual transaction prices. Using the … important findings are: 1.The degree of price rigidity in many industries is significant. It is not unusual in some industries … commodities, the correlation of price changes across buyers is very low. 3.There is no evidence that there is an asymmetry in …

. We find that the relative importance of contracting depends on, inter alia, the variance of the spot price and the … and price rigidity are more likely the more important demand shocks are relative to supply shocks. We adapt our static … model of contract price and quantity determination to discuss the adjustment of contract prices. Finally, we discuss three …

The menu-cost interpretation of sticky prices implies that the probability of a price change should depend on the past … history of prices and fundamentals only through the gap between the current price and the frictionless price. We find that … menu-cost model as a literal description of these firms' behavior, arguing instead that price stickiness arises from …

between notional and effective demands, and using it to explain price and quantity adjustments in conditions of unemployment …

a large empirical literature from the 1950's and 60's, that it is necessary to distinguish the response of price to an … two models that can potentially explain these findings. Both break the link between price and marginal cost, thereby … second is driven by firms pricing to limit non-price competition within their market …

identified monetary policy shocks, and show little evidence of a quot;price puzzle,quot; contrary to existing studies based on …

Arthur M. Okun's last book, Prices and Quantities, contributes a theory of universal wage and price stickiness, but … empirical characterization of price and wage changes over the last century in the U.S., U.K., and Japan, in order to demonstrate … to depend on both the level and rate of change of aggregate demand, by allowing demand to influence price- setting as …

Inflation equals the product of two terms: an extensive margin (the fraction of items with price changes) and an … intensive margin (the average size of those price changes). The variance of inflation over time can be decomposed into … by the U.S. Bureau of Labor Statistics to decompose the variance of consumer price inflation from 1988 through 2003. We …