I show that a simple sticky price model based on Rotemberg (1982) is consistent with a variety of facts concerning the … detrended levels of output and prices when the Beveridge-Nelson method is used to detrend both the price and output data. Such a … prices and hours of work. I also study the size of the predictable price movements that are associated with predictable …

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

In the post-World War II period, wage and price levels reacted much less to business contractions than they did in … paper takes a look at the assumptions concerning wage and price behavior in types of contemporary macroeconomic theories and … related to each other and to alternative theories of how markets clear. Long-term stable wage and price arrangements or …

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 …

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 …

setting up a pricing formula. Once the capital stock is chosen,the right price to charge the buyer is marginal cost. But the … seller. If the seller can achieve a high price by deliberately under-investing and driving up marginal cost, there will be … cost. Such a contract or policy will make the price, in the sense of the revenue of the seller per unit of output, appear …

Multi-sector sticky price models have surprising implications when durable goods have flexible prices. While in actual … flexible price industry for which the comovement problem is relevant. The underlying reason for the comovement problem is the …

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 …

This paper examines a model of dynamic price adjustment based on the assumption that information disseminates slowly … throughout the population. Compared to the commonly used sticky-price model, this sticky-information model displays three …

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 …