Consumer Imperfect Information and Endogenous Price Rigidity

• 成果类型: Article
• 署名作者: L'Huillier, Jean-Paul
• 署名单位: Brandeis University
• 刊物名称: AMERICAN ECONOMIC JOURNAL-MACROECONOMICS
• ISSN/ISSBN: 1945-7707
• DOI: 10.1257/mac.20170203
• 发表日期: 2020
• 页码: 94-123
• 关键词: private information; sticky prices; monetary; adjustment; fairness; POLICY; MODEL

摘要

This paper studies the propagation of monetary shocks in an economy featuring a strategic microfoundation for price rigidities. Following an aggregate shock to money, most consumers are initially uninformed. The market for goods is decentralized. Firms are better off delaying the adjustment of prices until enough consumers learn. At the same time, consumers learn from firms that have adjusted prices. The implied endogenous information diffusion follows a Bernoulli differential equation, implying a nonlinear path of learning. Nonlinear learning implies hump-shaped dynamics of output and inflation. A quantitative exercise suggests that these dynamics can be sizable and persistent.