MARKET POWER, PRICE ADJUSTMENT, AND INFLATION

• 成果类型: Article
• 署名作者: Head, Allen; Kumar, Alok; Lapham, Beverly
• 署名单位: Queens University - Canada; University of Victoria
• 刊物名称: INTERNATIONAL ECONOMIC REVIEW
• ISSN/ISSBN: 0020-6598
• DOI: 10.1111/j.1468-2354.2009.00571.x
• 发表日期: 2010
• 页码: 73-98
• 关键词: rate pass-through; monetary-policy; equilibrium unemployment; cyclical behavior; search; money; dispersion; DYNAMICS

摘要

We study a monetary search economy in which endogenous fluctuations in market power driven by changes in consumers' search intensity determine the extent of price adjustment to movements in productivity and the money growth rate. A calibrated version of the economy exhibits countercyclical fluctuations in markups and is consistent with the observed incomplete response of nominal prices to cost movements associated with productivity fluctuations and to changes in the money growth rate. Furthermore, a higher average rate of inflation results in a lower average markup and increases the sensitivity of prices to fluctuations in either productivity or money growth.