price stickiness

Mathematical example: a little price stickiness can go a long way.

He did important work on menu costs, which are a source of price stickiness.

I don't, because as Keynes said, we have price stickiness.

Price stickiness is extremely common among large supermarket chains and prices, especially for commodities, tend not to vary much between them.

Because of this expense, firms sometimes do not always change their prices with every change in supply and demand, leading to price stickiness.

Analysis often revolves around causes of such price stickiness and their implications for reaching a hypothesized long-run equilibrium.

Other sources of price stickiness include:

In recent years a number of economists have developed models which make price stickiness and the ensuing failure of markets to clear central to their analysis.

Price stickiness.

The new Keynesian explanation of price stickiness relied on introducing imperfect competition with price (and wage) setting agents.

Price stickiness means that there are a variety of possible equilibria in the short run, so that rational expectations models do not produce any simple result.

Economists tend to cite four possible causes of price stickiness: menu costs, money illusion, imperfect information with regards to price changes, and fairness concerns.

The New Keynesians use "microfoundations" to demonstrate that price stickiness hinders markets from clearing.

The previous section has shown that the precise nature of price stickiness is of major importance to the results usually derived from rational expectations macroeconomic models.

Wage and price stickiness, and the other market failures present in New Keynesian models, imply that the economy may fail to attain full employment.

RBC dismissed the need to explain business cycles with price surprise, market failure, price stickiness, uncertainty, and instability.

"Some Macroeconomic Consequences of Price Stickiness" Manchester School March 1988 37-54.

The answer requires some specification of a 'quantity rule'; that is, a description of agents' behaviour when, because of price stickiness, disequilibrium prevails.

Examples of such price stickiness in particular markets include wage rates in labour markets and posted prices in markets deviating from perfect competition.

The need to find a sound theoretical basis for wage and price stickiness has inspired a large and growing literature on what has become known as 'contract theory'.

Blinder, A. (1998) Asking About Prices: A New Approach to Understanding Price Stickiness.

Calvo, together with Edmund Phelps and John B. Taylor, did pioneering work on staggered wage setting as a channel for producing price stickiness.

In many areas, some form of price stickiness is postulated to account for quantities, rather than prices, adjusting in the short run to changes on the demand side or the supply side.

George Akerlof's 'menu costs' arguments, showing that, under imperfect competition, small deviations from rationality generate significant (in welfare terms) price stickiness, are good example of this kind of work.

This is in contrast with its rival new Keynesian school that uses microfoundations such as price stickiness and imperfect competition to generate macroeconomic models similar to earlier, Keynesian ones.