We develop a simple menu-cost model with non-constant elasticity of demand that features idiosyncratic productivity and … demand shocks. The model is calibrated to match firm-level productivity and demand processes estimated from U.S. data … the interaction between non-constant elasticity of demand and idiosyncratic demand shocks. Thus, this framework …

In this paper we verify the functioning of the standard neoclassical adjustment to equilibrium after a demand shock in … guaranteed. We show that the size of the demand shock determines the nature and number of equilibria generated by strategic …

. The model shows that a negative demand shock can facilitate cartel formation despite lowering collusive profits. This is … shape competition by investing into production capacity while being subject to unexpected demand shocks with persistence … because lower demand reduces capacity utilization and makes competition more intense especially when capacities are durable …

who invest into production capacity, sell a near-homogeneous good, and are subject to unexpected demand shocks with … persistence. The firms either compete or collude in prices. The model shows that a reduction of demand may promote collusion … despite lowering collusive profits. This is the case when capacities are durable and a perceptible decline in demand creates …

framework and firm-level prices and quantities data for detailed products allowing us to both measure demand, and its changes …. This in turn allows us to measure how changes in TFP-Q, demand and markups ultimately affected revenue TFP, as well as …-recession is due to both a weakening of demand and a decreasing TFP-Q pushing down sales, markups, revenue TFP and labour …

In this paper we verify the functioning of the standard neoclassical adjustment to equilibrium after a demand shock in … guaranteed. We show that the size of the demand shock determines the nature and number of equilibria generated by strategic …

non-constant demand elasticity. By using a homescan data set for three European countries, including prices and quantities … demand and on the degree of demand-side real rigidities. We find that price elasticites of demand are about 4 in the median …. Furthermore, we find evidence for demand-side real rigidities. These are, however, much smaller than what is often assumed in …

non-constant demand elasticity. By using a homescan data set for three European countries, including prices and quantities … demand and on the degree of demand-side real rigidities. We find that price elasticities of demand are about 4 in the median …. Furthermore, we find evidence for demand-side real rigidities. These are, however, much smaller than what is often assumed in …