Download or read book On the Aggregate Implications of Optimal Price Adjustment written by Barry Vincent Cozier and published by . This book was released on 1989 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book On the Aggregate Implications of Optimal Price Adjustment written by Bank of Canada and published by . This book was released on 1989 with total page 21 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Optimal Pricing Inflation and the Cost of Price Adjustment written by Eytan Sheshinski and published by MIT Press. This book was released on 1993 with total page 546 pages. Available in PDF, EPUB and Kindle. Book excerpt: These collected articles constitute what is perhaps the definitive study of pricing models under inflation, providing a solid basis for further research on this elusive question. What are the real effects of inflation? These collected articles constitute what is perhaps the definitive study of pricing models under inflation, providing a solid basis for further research on this elusive question. Covering a broad range of theory and applications by well-known microeconomists, the eighteen contributions evaluate the effects of inflation on aggregate output and on welfare and reveal the scope of recent efforts to explicitly incorporate frictions in economic models. A basic building block common to most of the essays in this volume is the observation that individual firms change nominal prices intermittently. The frequency and size of nominal price changes are influenced by the cost of price adjustment and changes in the economic environment, production costs, market demand, market structure, and most important, inflation. Thus the degree of nominal rigidity is influenced by the economic environment, and in a dynamic context. Two introductory essays survey the empirical studies of pricing policies by individual firms and the theoretical efforts to integrate the nominal rigidities at the micro level into macro relationships. The essays that follow treat the general problem of optimal dynamic adjustment in the presence of convex costs of adjustment, include applications of the inventory models to the case of nominal price adjustment by an individual firm, address the question of aggregation, introduce active search by consumers, and provide empirical analysis of nominal price rigidities.
Download or read book Asymmetric Price Adjustment and Economic Fluctuations written by Laurence M. Ball and published by . This book was released on 1992 with total page 29 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Price Adjustment Under Inflation and Rules of Trade written by Timur Kuran and published by . This book was released on 1982 with total page 326 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Individual Price Adjustment Along the Extensive Margin written by Etienne Gagnon and published by . This book was released on 2012 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Firms employ a rich variety of pricing strategies whose implications for aggregate price dynamics often diverge. This situation poses a challenge for macroeconomists interested in bridging micro and macro price stickiness. In responding to this challenge, we note that differences in macro price stickiness across pricing mechanisms can often be traced back to price changes that are either triggered or cancelled by shocks. We exploit observed micro price behavior to quantify the importance of this margin of adjustment for the response of inflation to shocks. Across a range of empirical exercises, we find strong evidence that changes in the timing of price adjustments contribute significantly to the flexibility of the aggregate price level.
Download or read book Price Rigidity written by Emi Nakamura and published by . This book was released on 2013 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: We review recent evidence on price rigidity from the macroeconomics literature, and discuss how this evidence is used to inform macroeconomic modeling. Sluggish price adjustment is a leading explanation for large effects of demand shocks on output and, in particular, the effects of monetary policy on output. A recent influx of data on individual prices has greatly deepened macroeconomists' understanding of individual price dynamics. However, the analysis of these new data raise a host of new empirical issues that have not traditionally been confronted by parsimonious macroeconomic models of price-setting. Simple statistics such as the frequency of price change may be misleading guides to the flexibility of the aggregate price level in a setting where temporary sales, product-churning, cross-sectional heterogeneity, and large idiosyncratic price movements play an important role. We discuss empirical evidence on these and other important features of micro price adjustment and ask how they affect the sluggishness of aggregate price adjustment and the economy's response to demand shocks.
Download or read book Output Fluctuations and Gradual Price Adjustment written by Robert J. Gordon and published by . This book was released on 1981 with total page 100 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper reviews the leading ideas that have emerged within two paradigms of price adjustment. Neither, it appears, provides a satisfactory theoretical scheme when taken in isolation. This paper concludes that an attempt to merge the more convincing elements of each is needed, and some suggestions for such a merger are put forward.
Download or read book Optimal Price Adjustment with Time dependent Costs written by Joshua Aizenman and published by . This book was released on 1984 with total page 26 pages. Available in PDF, EPUB and Kindle. Book excerpt: The purpose of this paper is to analyze an optimal pricing rule for the case in which the costs of price adjustment are time dependent, and where those costs depend positively on the magnitude of the percentage price change. By means of discrete time model, it is shown that the optimal response to the problem under consideration is to pre-set prices for each period at the end of the previous period. Within the period prices will adjust if the unexpected shock exceeds a threshold level. In such a case the new price is established at a level that is a weighted average of the pre-set level and of the equilibrium level that would have obtained in the absence of costs of contemporaneous price adjustment. Under certain conditions, which are derived in the paper, higher volatility of unexpected inflation might reduce relative price volatility.
Download or read book NBER Macroeconomics Annual 2005 written by Kenneth S. Rogoff and published by MIT Press. This book was released on 2006-04 with total page 479 pages. Available in PDF, EPUB and Kindle. Book excerpt: The 20th NBER Macroeconomics Annual, covering questions at the cutting edge of macroeconomics that are central to current policy debates.
Download or read book Output Employment and Prices in a World with Adjustment Costs written by Gil Mehrez and published by . This book was released on 1995 with total page 166 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Microeconomic Price Adjustments and Inflation written by Angel Estrada and published by . This book was released on 1999 with total page 48 pages. Available in PDF, EPUB and Kindle. Book excerpt: Illustrates the implications for aggregate price dynamics of alternative characterizations of microeconomic price adjustment policies.
Download or read book Optimal Price Adjustment when Consumers are Learning the Dependence of Quality on Price written by Josef Falkinger and published by . This book was released on 1991 with total page 50 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book The Art of Smooth Pasting written by A. Dixit and published by Routledge. This book was released on 2013-11-12 with total page 96 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book aims to widen the understanding of stochastic dynamic choice and equilibrium models. It offers a simplified and heuristic exposition of the theory of Brownian motion and its control or regulation, rendering such methods more accessible to economists who do not require a detailed, mathematical treatment of the subject. The main mathematical ideas are presented in a context which with which economists will be familiar. Using a binomial approach to Brownian motion, the mathematics is reduced to simple algebra, progressing to some equally simple limits. The starting point of the calculus of Brownian motion - 'Ito's Lemma' - emerges by analogy with the economics of risk-aversion. Conditions for the optimal regulation of Brownian motion, including the important, but often mysterious, 'smooth pasting' condition, are derived in a similar way. Each theoretical derivation is illustrated by developing a significant economic application, drawn mainly from recent research in macroeconomics and international economics.
Download or read book Setting the Right Prices for the Wrong Reasons written by Christian Hellwig and published by . This book was released on 2018 with total page 55 pages. Available in PDF, EPUB and Kindle. Book excerpt: Nominal price adjustment is studied in an environment with firm-specific and aggregate shocks to economic fundamentals and incomplete, dispersed information. Firms update their expectations about fundamentals based on their own cash flows (revenues and wages). We show that in a model with realistic levels of product-level price dispersion, the firms' inference about aggregate shocks is very gradual, yet in the aggregate prices adjust rapidly in response to aggregate nominal shocks. When an aggregate shock occurs, firms mistakenly attribute it to firm-specific shocks, but adjust prices nevertheless, since the exact nature of the shock matters little for their optimal pricing decision.
Download or read book The Expected Hitting Time Approach to Optimal Price Adjustment Problems written by Yiying Cheng and published by . This book was released on 2017 with total page 37 pages. Available in PDF, EPUB and Kindle. Book excerpt: We offer a novel approach for solving optimal price adjustment problems, when the underlying process is a Geometric Brownian Motion (GBM) process. Our approach relies on characterizing the cumulative cost of deviation and the cost of adjusting price until the hitting time of the lower or upper barriers. Using this approach, we are able to derive an analytical expression for the cost function, that does not require solving a PDE or running Monte-Carlo simulations. We apply our framework to the real world problem of adjusting domestic energy prices in countries that adopt administratively-set energy price rules. Our toolbox code in Matlab can be easily modified to be used to calculate optimal policies in a wide range of topics in finance, operations management, economics, and natural resource management.
Download or read book The Inflation Targeting Debate written by Ben S. Bernanke and published by University of Chicago Press. This book was released on 2007-11-01 with total page 469 pages. Available in PDF, EPUB and Kindle. Book excerpt: Over the past fifteen years, a significant number of industrialized and middle-income countries have adopted inflation targeting as a framework for monetary policymaking. As the name suggests, in such inflation-targeting regimes, the central bank is responsible for achieving a publicly announced target for the inflation rate. While the objective of controlling inflation enjoys wide support among both academic experts and policymakers, and while the countries that have followed this model have generally experienced good macroeconomic outcomes, many important questions about inflation targeting remain. In Inflation Targeting, a distinguished group of contributors explores the many underexamined dimensions of inflation targeting—its potential, its successes, and its limitations—from both a theoretical and an empirical standpoint, and for both developed and emerging economies. The volume opens with a discussion of the optimal formulation of inflation-targeting policy and continues with a debate about the desirability of such a model for the United States. The concluding chapters discuss the special problems of inflation targeting in emerging markets, including the Czech Republic, Poland, and Hungary.
