A Theory of Supply Function Choice and Aggregate Supply

• 成果类型: Article
• 署名作者: Flynn, Joel P.; Nikolakoudis, George; Sastry, Karthik A.
• 署名单位: Yale University; University of Chicago; Princeton University
• 刊物名称: AMERICAN ECONOMIC REVIEW
• ISSN/ISSBN: 0002-8282; 1944-7981
• DOI: 10.1257/aer.20240443
• 发表日期: 2026-02
• 页码: 710-748
• 关键词: sticky prices; menu costs; inflation; expectations; neutrality; uncertain; DYNAMICS; TRADE

摘要

Modern theories of aggregate supply are built on the foundation that firms set prices and commit to producing whatever the market demands. We remove this strategic restriction and allow firms to choose supply functions, mappings that describe the prices charged at each quantity of production. Theoretically, we characterize firms' optimal supply function choices in general equilibrium and study the resulting implications for aggregate supply. Aggregate supply flattens under lower inflation uncertainty, higher idiosyncratic demand uncertainty, and less elastic demand. Quantitatively, our theory can rationalize the flattening of aggregate supply during the Great Moderation and steepening during the 1970s and 2020s. (JEL D21, D43, E13, E23, E31, E32)