The paper shows how prolonged price inertia can arise in a macroeconomic system in which there are temporary price …, say, by changes in the money supply - have long-lasting price and quantity effects. Specifically, a temporary demand shift … generates "persistence" in price-quantity decisions, in the sense that the price-quantity effects of this shift persist for long …

The paper shows how prolonged price inertia can arise in a macroeconomic system in which there are temporary price …, say, by changes in the money supply -- have long-lasting price and quantity effects. Specifically, a temporary demand … shift generates `persistence' in price-quantity decisions, in the sense that the price-quantity effects of this shift …