Repricing Avalanches

• 成果类型: Article
• 署名作者: Nirei, Makoto; Scheinkman, Jose A.
• 署名单位: University of Tokyo; Princeton University; National Bureau of Economic Research
• 刊物名称: JOURNAL OF POLITICAL ECONOMY
• ISSN/ISSBN: 0022-3808
• DOI: 10.1086/727286
• 发表日期: 2024
• 页码: 1327-1388
• 关键词: monetary-policy rules; MENU-COST; HIGH INFLATION; macroeconomic stability; prices; DYNAMICS; output; Heterogeneity; origins

摘要

We present a menu-cost pricing model with a large but finite number n of firms. A firm's nominal price increase lowers other firms' relative prices, thereby inducing further nominal price increases. The distribution of these repricing avalanches converges as n ->infinity to a mixture of generalized Poisson distributions with an indexofdispersion=1/(1-theta)2, where theta is determined by the equilibrium of the continuous limit. We calibrate the model to the US experience during 1988-2005 and obtain a theta surprisingly close to unity. Our model accounts for the positive relationship between inflation level and volatility observed in the data.