Bar-Ilan, Avner; Blinder, Alan S - In: Journal of Money, Credit and Banking 24 (1992) 2, pp. 258-72
The authors argue that lumpy, nonconvex transaction costs are the norm for a wide range of economic decisions, which are thus characterized by inertial behavior. Application of this idea to the consumption of durable goods yields an (S,s) decision rule, which, when aggregated, highlights the...