Price competition in an inflationary environment

• 成果类型: Article
• 署名作者: Duersch, Peter; Eife, Thomas A.
• 署名单位: Ruprecht Karls University Heidelberg
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/j.jmoneco.2018.09.004
• 发表日期: 2019
• 页码: 48-66
• 关键词: inflation; markups; experiment; Money illusion; COOPERATION

摘要

In an experimental study with price-setting firms we find that inflation significantly reduces real prices (by lowering price markups) and significantly raises welfare compared to the treatment with a constant overall price level. Money illusion and a reduced ability to collude in an environment with a constantly changing, i.e., increasing, price level drive this result. In a third treatment with deflation, collusion is somewhat reduced as well, but money illusion pushes prices up so that welfare is lower than under inflation. (C) 2018 Elsevier B.V. All rights reserved.