| 来源类型 | Discussion paper
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| 规范类型 | 论文
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| 来源ID | DP9912
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| DP9912 Precautionary price stickiness |
| James Costain; Anton Nakov
|
| 发表日期 | 2014-03-23
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| 出版年 | 2014
|
| 语种 | 英语
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| 摘要 | This paper proposes a model in which retail prices are sticky even though firms can always change their prices at zero cost. Instead of imposing a "menu cost", we assume that more precise decisions are more costly. In equilibrium, firms optimally make some errors in price-setting, thus economizing on managerial time. Both the time cost of choice, and the resulting risk of errors, give firms an incentive to leave their prices unchanged until they perceive a sufficiently large deviation from the optimal price.
We show that pricing errors help explain several "puzzles" from microdata: (1) small and large price changes coexist; (2) the probability of price adjustment is largely independent of the time since last adjustment; (3) the size of the adjustment is largely independent of the time since last adjustment; (4) extreme prices are younger than prices near the center of the distribution; (5) the coefficient of variation of prices is greater than that of costs; (6) the standard deviation of price adjustments is largely independent of the inflation rate, and the fraction of price increases converges slowly towards 100% as inflation rises.
However, on the macroeconomic side, pricing errors do little to explain the real effects of monetary shocks. Since firms making sufficiently large errors always choose to adjust, a nominal shock generates a strong, inflationary "selection effect". Thus, like Golosov and Lucas (2007), we find that money shocks are almost neutral, but our model fits microdata better than their specification does. |
| 主题 | International Macroeconomics
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| 关键词 | (s
S)
Logit equilibrium
Near-rational behavior
Nominal rigidity
Adjustment
State-dependent pricing
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| URL | https://cepr.org/publications/dp9912
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| 来源智库 | Centre for Economic Policy Research (United Kingdom)
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| 资源类型 | 智库出版物
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| 条目标识符 | http://119.78.100.153/handle/2XGU8XDN/538746
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推荐引用方式
GB/T 7714 |
James Costain,Anton Nakov. DP9912 Precautionary price stickiness. 2014.
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