Inflation, costly price and quantity adjustments, and time spent in the Keynesian regime

Leif Danziger

doi:10.1016/S0165-1765(03)00095-8

Inflation, costly price and quantity adjustments, and time spent in the Keynesian regime

Leif Danziger

Research output: Contribution to journal › Article › peer-review

5 Scopus citations

Abstract

This paper considers a menu-cost firm under inflation. Due to costly quantity adjustments, the firm is sometimes in a Keynesian regime where sales are demand determined. With a positive real interest rate, the proportion of time in the Keynesian regime is less than the inverse of the absolute value of the average elasticity of demand in that regime.

Original language	English
Pages (from-to)	161-166
Number of pages	6
Journal	Economics Letters
Volume	80
Issue number	2
DOIs	https://doi.org/10.1016/S0165-1765(03)00095-8
State	Published - 1 Aug 2003
Externally published	Yes

Keywords

Inflation
Keynesian regime
Menu cost
Quantity-adjustment cost

ASJC Scopus subject areas

Finance
Economics and Econometrics

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10.1016/S0165-1765(03)00095-8

Cite this

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abstract = "This paper considers a menu-cost firm under inflation. Due to costly quantity adjustments, the firm is sometimes in a Keynesian regime where sales are demand determined. With a positive real interest rate, the proportion of time in the Keynesian regime is less than the inverse of the absolute value of the average elasticity of demand in that regime.",

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AB - This paper considers a menu-cost firm under inflation. Due to costly quantity adjustments, the firm is sometimes in a Keynesian regime where sales are demand determined. With a positive real interest rate, the proportion of time in the Keynesian regime is less than the inverse of the absolute value of the average elasticity of demand in that regime.

KW - Inflation

KW - Keynesian regime

KW - Menu cost

KW - Quantity-adjustment cost

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Inflation, costly price and quantity adjustments, and time spent in the Keynesian regime

Abstract

Keywords

ASJC Scopus subject areas

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