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On inflation and output with costly price changes a simple unifying result by Roland Benabou

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Published by Dept. of Economics, Massachusetts Institute of Technology in Cambridge, Mass .
Written in English


Book details:

Edition Notes

Includes bibliographical references (p. 11).

Statementby Roland Benabou and Jerzy D. Konieczny
SeriesWorking paper / Dept. of Economics -- no. 586, Working paper (Massachusetts Institute of Technology. Dept. of Economics) -- no. 586.
ContributionsKonieczny, Jerzy D., Massachusetts Institute of Technology. Dept. of Economics
The Physical Object
Pagination11 p. ;
Number of Pages11
ID Numbers
Open LibraryOL24637661M
OCLC/WorldCa24884790

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Get this from a library! On inflation and output with costly price changes: a simple unifying result. [Roland Benabou; Jerzy Konieczny; National Bureau of Economic Research.] -- We analyze the effect of inflation on the average output of monopolistic firms facing a small fixed cost of changing nominal prices. Using Taylor expansions, we derive a general closed-form . On Inflation and Output with Costly Price Changes: A Simple Unifying Result. On Inflation and Output with Costly Price Changes: A Simple Unifying Result We analyze the effect of inflation on the average output of monopolistic firms facing a small fixed cost of changing nominal prices. Using Taylor expansions, we derive a general closed-form solution for the slope of the long-run Phillips curve. On Inflation and Output with Costly Price Changes: A Simple Unifying Result Roland Benabou, Jerzy Konieczny. NBER Technical Working Paper No. Issued in May NBER Program(s):Economic Fluctuations and Growth Program. We analyze the effect of inflation on the average output of monopolistic firms facing a small fixed cost of changing.

The output-inflation trade-off is investigated in a rational expectations equilibrium economy in which costly price setting makes it inefficient for agents to vary their prices at every instant. It is shown that "sticky prices" are not some exogenous source of output fluctuation but result from the monetary policy process. An economy with slow and counterinflationary money growth Cited by: "The Output-Inflation Tradeoff when Prices are Costly to Change," UWO Department of Economics Working Papers , University of Western Ontario, Department of Economics. More about this item Statistics. Inflation: Causes, Costs, and Current Status Congressional Research Service 2 a monetary phenomenon resulting from and accompanied by a rise in the quantity of money relative to output.”5 Although this view is generally accepted, it is, in fact, consistent with two quite different views as to the cause of Size: KB.   The direct relationship between oil and inflation was evident in the s when the cost of oil rose from a nominal price of $3 before the oil .

Note that umc/P is the imported materials cost as a share of the price of a unit of output, while ulc/P is the wage cost as a share of the price of a unit of output. For example, suppose the price per unit is $5, imported materials cost $1 per unit and labour costs $ per unit. Further, inflationary situation may be as­sociated with the fall in output, particularly if inflation is of the cost-push variety. Thus, there is no strict relationship between prices and output. An increase in aggregate demand will increase both prices and output, but a supply shock will raise prices and lower output. Authors James Bullard and Steven Russell, for example, suggest approximately a 1 percent output loss for each 1 percent increase in inflation above price stability.3 Martin Feldstein has examined how interactions between inflation and the tax system discourage saving while increasing housing demand.4Author: Richard G. Anderson. This volume presents the latest thoughts of a brilliant group of young economists on one of the most persistent economic problems facing the United States and the world, inflation. Rather than attempting an encyclopedic effort or offering specific policy recommendations, the contributors have emphasized the diagnosis of problems and the description of events that economists Reviews: 1.