inflation and relative price variability in the euro area evidence from a panel threshold model the impact of inflation on relative price variability rpv generates an important channel for real effects of inflation this article provides first evidence on the empirical relation between inflation and rpv in the euro area stirred by the widespread use of inflation caps or target bands in monetary policy practice we are particularly interested in threshold effects of inflation in line with the predictions of monetary search models our results indicate that expected inflation significantly increases rpv only if inflation is either very low below 0 95 per annum p a or very high above 4 96 p a

dynamic perspectives on agricultural policy issues among the innovators fred waugh was one of the most prolific he made pioneering contributions in linear programming statistics and econometrics demand analysis the welfare effects of price risk and the analysis and explanation of commodity cycles as a research leader mentor and teacher at the usda he left his mark on the work of later generations of researchers i find myself no exception as will become clear from what i have to say in this paper even though i never met him in person my work has been influenced by what he wrote and by what his students wrote and taught among the many topics that interested waugh were the dynamics of free market behavior and the implications for policy formation in this paper i consider models of markets in which the dynamics run in two directions forward from current conditions to expectations of future prices and back from price expectations to current decisions both types of linkages can be crucial in competitive models of agricultural production in which land has a prominent role as the quintessential fixed asset a central challenge of market analysis from waugh s time till now has been to infer from market observations whether markets are behav

the behavior of prices and inflation an empirical analysis of disaggregat price data this paper analyzes the effects of inflation on the dispersion of prices as well as other aspects of price behavior using disaggregated data on prices of foodstuffs in israel during 1978 84 we find that the effect of expected inflation on intramarket price variability is stronger than the effect of unexpected inflation we show that even in times of high inflation price quotations are not trivially short and price changes are not synchronized across firms these facts taken together confirm that there is some staggering in the setting of prices we find that the distribution of real prices is far from being uniform as many menu cost based models assume or conclude in fact as inflation increases to very high levels this distribution is not even symmetric when the annual inflation rate reaches 130 percent there are equal chances of finding real prices above or below the market average but upward deviations in the real price are further away from zero than downward ones furthermore as the annu

discrete equilibrium price dispersion an explicit solution of an equilibrium model with price setting firms and searching customers makes possible a number of comparativestatics predictions about how cost differences among firms search costs of customers and taxes will affect the mean and variance of the distribution of market prices another implication of the model is that a firm s demand depends on the difference between its price and the average price in the market

menu costs and markov inflation a theoretical revision with new evidence abstract we revisit a foundational theoretical paper in the menu cost literature sheshinski and weiss 1983 optimum pricing policy under stochastic inflation review of economic studies 50 3 513 529 one of the few to treat stochastic inflation with persistent deviations from trend in contrast to the original finding we show that optimal pricing in this environment entails using different s s bands in high inflation and low inflation states of the world the low inflation band is strictly contained within the high inflation band this revised solution has very different implications from the original one firms are generally risk loving not risk averse with respect to inflation an increase in the variance of inflation increases price dispersion when inflation is high and decreases price dispersion when inflation is low on an aggregate level this optimal pricing would lead to bunching of prices and non neutrality of money in the setting of caplin and spulber 1987 menu costs and the neutrality of money quarterly journal of economics 102 4 703 725 to test the main finding we construct an establishment level dataset from the months surrounding mexico s tequila crisis in 1995 in the high inflation state price increases are larger and establishments allow their prices to vary more widely around their respective long run mean relative prices cross establishment price dispersion is lower but this result seems due to decreased establishment heterogeneity rather than narrower s s bands overall the evidence suggests that establishments employ wider s s bands in the high inflation state

some models for estimating technical and scale inefficiencies in data envelopment analysis in management contexts mathematical programming is usually used to evaluate a collection of possible alternative courses of action en route to selecting one which is best in this capacity mathematical programming serves as a planning aid to management data envelopment analysis reverses this role and employs mathematical programming to obtain ex post facto evaluations of the relative efficiency of management accomplishments however they may have been planned or executed mathematical programming is thereby extended for use as a tool for control and evaluation of past accomplishments as well as a tool to aid in planning future activities the ccr ratio form introduced by charnes cooper and rhodes as part of their data envelopment analysis approach comprehends both technical and scale inefficiencies via the optimal value of the ratio form as obtained directly from the data without requiring a priori specification of weights and or explicit delineation of assumed functional forms of relations between inputs and outputs a separation into technical and scale efficiencies is accomplished by the methods developed in this paper without altering the latter conditions for use of dea directly on observational data technical inefficiencies are identified with failures to achieve best possible output levels and or usage of excessive amounts of inputs methods for identifying and correcting the magnitudes of these inefficiencies as supplied in prior work are illustrated in the present paper a new separate variable is introduced which makes it possible to determine whether operations were conducted in regions of increasing constant or decreasing returns to scale in multiple input and multiple output situations the results are discussed and related not only to classical single output economics but also to more modern versions of economics which are identified with contestable market theories

learning in an equilibrium search model this paper explores the role of learning in an equilibrium search model with asymmetric information firms with identical but privately observed marginal cost sell a homogeneous good to heterogeneously informed consumers a reservation price equilibrium exists if the uninformed consumers search cost is sufficiently large in this equilibrium the amount of price dispersion is inversely related to the realization of marginal cost also the average price level is less responsive to cost changes than when cost is observable finally uncertainty about firms marginal cost increases the expected price level copyright 1994 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

the dynamics pattern of price dispersion in retail fuel markets abstract this paper empirically investigates the dynamics of price dispersion in retail fuel markets as a response to the corresponding wholesale price changes for this purpose we take advantage of a daily dataset of prices fixed by gas stations in two spanish regions it is consistently found that retail price dispersion is temporarily enlarged as a consequence of wholesale price increases while it is reduced due to decreases the presence of asymmetries in the short run dynamics is also revealed the impact of positive changes in the wholesale price is in the first days of adjustment clearly greater the dynamics pattern could be explained at least in part by the faster response of prices in the stations associated with the two vertically integrated companies that have the largest market share i e repsol and cepsa

relative price variability and inflation evidence from us cities we test whether the time series positive correlation of inflation and intermarket relative price variability is also present in a cross section of u s cities we find this correlation to be a robu

endogenous search price dispersion and welfare abstract this paper studies the welfare cost of inflation in a frictional monetary economy with endogenous consumer search equilibrium entails price dispersion where sellers compete for buyers by posting prices we identify three channels through which inflation affects welfare the real balance channel is the source of welfare loss its interaction with the price posting channel generates a welfare cost larger than lucas 2000 the search channel reduces the welfare cost by more than one half through general equilibrium effect the aggregate effect of these three channels on welfare is non monotonic additionally the welfare cost of inflation fluctuations is negligible

estimation of dynamic nonlinear rational expectations models of primary commodity markets with stochastic dynamic programming and disequilibrium maximum likelihood methods are combined to estimate a dynamic nonlinear rational expectations model of a market for a storable primary commodity the estimation model captures the inherently nonlinear structure of private stockholding dynamics the disequilibrium effects of government buffer stock intervention and the impact of price expectations and risk on private supply and stockholding decisions copyright 1993 by mit press

money and the dispersion of relative prices revisited this study extends the literature on relative price dispersion by addressing two questions that have remained largely unanswered a what is the impact on relative price dispersion of the variance of the uncertain relationship between money and prices b is there evidence across industries of a differential impact on price dispersion of the variance of the uncertain relationship between money and prices these issues are examined in a bivariate garch m model using monthly data from 1963 1997 the results at the aggregate level indicate that the variance of the uncertain relationship between money and prices has a positive and significant impact on relative price dispersion during the period 1963 to 1997 disaggregated analysis at the industry level suggests that the magnitude of the impact of the variance of the uncertain money price relationship differs greatly across industries and generally tends to have a greater impact on the price dispersion of durable goods than on the price dispersion of nondur

inflation price dispersion and market structure abstract in this paper we use a novel data set containing prices from bazaars convenience stores and supermarkets in istanbul to re examine the relationship between price dispersion and inflation although existing evidence is mixed we find positive and significant relationships between dispersion on the one hand and lagged dispersion and unexpected product specific inflation on the other we also find evidence that dispersion is initially decreasing in anticipated aggregate inflation but is eventually increasing finally average price duration and dispersion are lowest in the bazaar this is intuitive since menu and search costs should be minimal in that market structure

dynamic programming models and algorithms for the mutual fund cash balance problem fund managers have to decide the amount of a fund s assets that should be kept in cash considering the trade off between being able to meet shareholder redemptions and minimizing the opportunity cost from lost investment opportunities in addition they have to consider redemptions by individuals as well as institutional investors the current performance of the stock market and interest rates and the pattern of investments and redemptions that are correlated with market performance we formulate the problem as a dynamic program but this encounters the classic curse of dimensionality to overcome this problem we propose a provably convergent approximate dynamic programming algorithm we also adapt the algorithm to an online environment requiring no knowledge of the probability distributions for rates of return and interest rates we use actual data for market performance and interest rates and demonstrate the quality of the solution compared to the optimal for the top 10 mutual funds in each of nine fund categories we show that our results closely match the optimal solution in considerably less time and outperform two static newsvendor models the result is a simple policy that describes when money should be moved into and out of cash based on market performance

inflation and relative price variability new evidence for the united states this article provides new evidence on the empirical relationship between inflation and relative prices in the united states in line with the predictions of recent monetary search models we find that the impact of expected inflation on relative price variability rpv has disappeared during the recent period when inflation expectations have been stabilized on a low level endogenous break point tests are applied to identify the timing and to confirm the significance of the changing role of inflation for rpv the empirical findings are robust with respect to different price indices disaggregation levels and measurement concepts

the relationship between relative prices and the general price level it is very nearly a truismi amaong neoclassical economists that the public is wont to confuse changes in the general price level with relative price changes correspondingl y one might speak of the independence between the two as one of the central postulates of the neoclassical tradition william stanley jevons was aml ong the first to identify this basic dichotomin economic life as well as to attempt to explain the ordinary citizen s seenming incapacity to understand it

price dispersion and inflation evidence from israel the paper considers the question whether observed price differentials reflect perceived differences in quality service agreements or location or whether information imperfections can explain this phenomenon it sets out theoretical arguments linking inflation to reductions in the information stock held by agents and thus to greater price dispersion the hypothesis is tested using monthly price data for 13 uniquely defined goods sold in israel between 1971 and 1984 price dispersion is shown to be positively related to the rate of market price inflation since inflation is an unlikely proxy for changes in perceived characteristics the findings support price dispersion theories based on optimally imperfect decision making

product variety and firm agglomeration for the purpose of explaining interindustry variation in the geographic distribution of firms we explore the impact of product heterogeneity on the incentives for firms to cluster in the presence of a ubiquitous periphery of stand alone firms our analysis revolves around two counteracting forces greater product heterogeneity increases consumer search which raises the amount of shopping at a cluster since this results in greater demand for a firm that joins the cluster this effect increases the incentive to cluster however greater product heterogeneity gives stand alone firms more local monopoly power since this raises their price cost margins this effect increases the incentive for a firm to stand alone our analysis shows that the former effect typically dominates so that greater firm agglomeration is associated with industries characterized by greater product heterogeneity

price stabilization using buffer stocks abstract the price stabilization problem is stated and solved for a nonlinear cobweb model with government stocks it is shown that if the storage capacity for the commodity is sufficiently large then there exists a simple stabilization policy called the keep supply at equilibrium kse policy such that the equilibrium price is a global attractor for the corresponding closed loop system in addition it is shown that if the government approximates the equilibrium supply with the average supply stabilization is guaranteed we refer to this policy as keep supply at average ksa

search with learning from prices does increased inflationary uncertainty lead to higher markups aggregate cost uncertainty arising from real shocks or unanticipated inflation reduces the informativeness of prices by scrambling relative and aggregate variations but when agents can acquire additional information such increased noise may in fact lead them to become better informed and price competition will intensify we examine these issues in a model of search with learning where consumers search optimally from an unknown price distribution while firms price optimally given consumers search rules we show that the decisive factor in whether inflation variability increases or reduces the incentive to search and thereby market efficiency is the size of informational costs

alert at maradi preventing food crises by using price signals national early warning systems of sahelian countries are mainly based on biophysics models to predict agricultural production shortages and prevent food crisis the objective of this paper is to show that cereal market prices also bring useful information on future food availability that could complete current early warning disposals indeed at any point in time prices are informative not only on the state of present food availability but also on agents expectations about future availability the research is based on the exploitation of the statistical properties of price series it aims at detecting movements in the prices trend signalling a coming crisis we first identify markets playing a leading role in price formation at the national and regional level through the estimation of var models the second step consists in identifying crisis periods and then the price shocks characterises during the period which precedes a crisis this analysis leads to the identification of early warning indicators whose relevance is tested using panel data qualitative choice models the data set encompasses 50 markets belonging to three countries mali burkina faso and niger over the period 1990 2008 the results show that past price shocks on a few number of leading marketplaces can help preventing coming crises

nonstandard foundations of equilibrium search models abstract we develop an equilibrium sequential search model which includes most of the literature as special cases in particular the model can accommodate heterogeneity in buyers search costs and demand functions and firms cost functions with general demand and cost functions we identify conditions which ensure existence of equilibrium in pure strategies utilizing recent progress in the theory of large games by khan and sun these conditions elucidate the essential structure of equilibrium search models although we focus on sequential search our methodology can be used for other classes of equilibrium search models as well

equilibrium price distributions equilibrium price distributions for a homogeneous product consistent with individual incentives are investigated they arise in informationally imperfect markets in which the only primitive datum is the distribution of search costs it is shown that single multi and continuous price distributions are all viable long run phenomena depending on the nature of search costs a method for computing equilibrium price distributions is also provided jevons law of one price has long been an accepted dictum in economic theory in a classroom presentation it still serves sometimes implicitly as a major premise in many micro models of market interaction much of the descriptive theory as well as welfare analysis hinges on this assumption yet one s day to day experience reveals that price differentials are a viable phenomenon and that looking for lower prices may very well be a rewarding activity the prospects of eventually hitting a bargain and the resulting price reduction would more than compensate for the cost incurred during the search process moreover the existence of price dispersions appear to be an empirically stable phenomenon snapshots of markets for relatively homogeneous products reveal substantial and recurring price differentials stigler 1961 and pratt wise and zeckhauser 1979 for example report some evidence supporting this claim an important article by stigler 1961 focused economists attention on the crucial role played by the informational structure of markets it gave rise to the study of the

inflation price dispersion and market integration through the lens of a monetary search model monetary search theory implies that the real effects of inflation via its impact on price dispersion depend on the level of search costs and thus on the level of market integration for less integrated markets the inflation price dispersion nexus is predicted to be asymmetrically v shaped which results in an optimal inflation rate above zero for highly integrated markets with low search costs however the impact of inflation on price dispersion should only be small using price data of the european union member states this paper is the first that tests and confirms these predictions of monetary search theory

conditional relative price variance and its determinants open economy evidence from germany the authors present empirical tests of two hypothesis derived from an open economy version of the multimarket equilibrium model the first hypothesis holds that the conditional relative price variance is positively related to the variance of domestic monetary and foreign nominal and real shocks the second hypothesis claims a negative impact of an increase in conditional relative price variance on normal output in contrast to earlier studies the authors use direct measures of conditional relative price variance based on arch estimates the authors results show that both hypotheses are consistent with german data copyright 1991 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

frictional goods markets theory and applications we analyse dynamic general equilibrium models with more or less directed search by informed buyers and random search by uninformed buyers this nests existing specifications and generates new insights a quantitative application concerns the welfare cost of inflation which is known to be quite high with pure random search and low with pure directed search our calibration implies the impact of inflation is fairly low in part because in addition to the usual costs it provides benefits by more heavily taxing high price sellers that inefficiently profit from exploiting the uninformed other applications analyse analytically and numerically changes in credit conditions and information

search market equilibrium bilateral heterogeneity and repeat purchases abstract we develop a general model of search market equilibrium with heterogeneous buyers and sellers this framework unifies previous models with one sided heterogeneity and clarifies many of their special properties it easily accounts for price dispersion active search and the matching of buyer and seller types it also extends to repeat purchases once we embed it into a dynamic game with incomplete information we formalize the inferences and strategies underlying equilibria where firms charge constant prices and customers patronize them loyally we establish a general correspondence between such equilibria and single purchase markets journal of economic literature classification numbers d83 l13

food security policy in a stochastic world abstract food security may be increased by variance reducing strategies by food aid or by development strategies this paper uses a korea cge model subjected to random fluctuation in world prices and domestic food productivity to evaluate these policies we find that poverty reducing development strategies are the most food security strategies

public policy markets and household coping strategies in bangladesh avoiding a food security crisis following the 1998 floods abstract at their peak the 1998 floods covered two thirds of bangladesh causing severe damage to the major rice crop and threatening the food security of tens of millions of households in this paper we first highlight the contribution of government policy interventions including trade liberalization in the early 1990s to stabilization of rice markets during and after the flood then using a panel data set covering 750 households in three rounds over a 13 month period we analyze impacts of the flood on household assets consumption and nutritional outcomes finally we present empirical estimates of the contribution of rice market stabilization and government transfers to household food consumption

poverty and famines an essay on entitlement and deprivation this book focuses on the causes of starvation in general and famines in particular the traditional analysis of famines is shown to be fundamentally defective and the author develops an alternative analysis

inflation and relative price variability reinstating parks results this paper revisits parks seminal work on the time series relationship between inflation and relative price variability the results reported show that a significant positive association is obtained allowing for an asymmetrical response of relative prices to episodes of positive and negative inflation this finding is maintained after excluding oil shock years extending park s original sample to 1996 using an alternative data set and allowing for a higher degree of disaggregation

price dispersion inflation and welfare we examine the implications of inflation for both price dispersion and welfare in a monetary search economy in our economy if the degree of buyers incomplete information about prices is fixed both price dispersion and real prices are increasing in inflation as the inflation rate approaches the friedman rule both price dispersion and welfare losses vanish if households choose the number of prices to observe then the optimal inflation rate may exceed the friedman rule as inflation induces search and up to a point raises welfare by eroding market power

an empirical model of search with vertically differentiated products this paper presents a nonsequential search model that allows for vertical product dierentiation in the unique symmetric equilibrium firms with dierent characteristics draw utilities from a common utility distribution because the firms dier in their characteristics this leads to dierent price distributions the model therefore provides a theoretical rationale for explaining price dispersion as a result of quality dierences and search behavior of consumers together using the equilibrium conditions derived from the model it is shown how to estimate search costs by maximum likelihood using only price data a data set on prices from dutch supermarkets reveals that the amount of search has decreased over the sampling period moreover ignoring vertical product dierentiation results in an overestimation of search costs

inflation and relative price variability in the short and long run new evidence from the united states this paper presents new evidence that a positive association exists between inflation and relative prices and relative inflation rates in very disaggregated data for the united states over the period 1975 through 1992 there is also evidence that the response of relative prices and relative inflation rates to inflation varies inversely with the information content of a given shock to inflation the relationship is studied from two cross sectional perspectives using individual price series collected from forty eight u s cities evidence on the persistence of the effects of inflation on relative prices is also presented results here demonstrate the absence of a long run relationship between inflation and relative price dispersion i e the two series are not cointegrated finally results from vector autoregressions further imply the effect is smaller than indicated by typical estimates copyright 1996 by ohio state university press

a quantile autoregression analysis of price volatility in agricultural markets this paper investigates the dynamics of agricultural price volatility based on a quantile autoregression qar model the qar model provides a flexible representation of the distribution of price and its dynamics the approach is applied to u s wheat and corn markets over the period of 1980 2017 this period is of significant interest as it covers important changes in agricultural policy and increased reliance on markets the price analysis is conducted conditional on stocks held in the previous period we show how increasing previous stocks shift the price distribution to the left and decreases the odds of facing price spikes by shifting down the upper tail of the price distribution our analysis also examines the effects of changing public stocks on prices for both wheat and corn this reflects changing agricultural policy contrasting the 1980s when public stocks were relatively high with the post 2005 period when public stocks became zero we document how higher public stock ratio during the previous period did not lower the odds of facing price spikes applied to the wheat and corn markets we also uncover evidence of local dynamic instability in the upper tail of the price distribution suggesting that price instability becomes more pronounced when previous stocks are low

an evaluation of energy environment economic efficiency for eu apec and asean countries design of a target oriented dfm model with fixed factors in data envelopment analysis abstract this paper aims to offer an advanced assessment methodology for sustainable national energy environment economic efficiency strategies based on an extended data envelopment analysis dea the use of novel efficiency improving approaches based on dea originates from the so called distance friction minimisation dfm method to design a feasible improvement strategy for low efficiency dmus we develop here a target oriented to dfm model however in many real world cases input factors may not be flexibly adjusted in the short run in this study we integrate the to dfm model with a fixed inflexible factor ff approach to cope with such more realistic circumstances super efficiency dea is next used in our comparative study on the efficiency assessment of energy environment economic targets for the eu apec and asean a a countries employing appropriate data sets from the years 2003 to 2012 we consider two inputs primary energy consumption and population and two outputs co 2 and gdp including a fixed input factor viz population on the basis of our dea analysis results eu countries appear to exhibit generally a higher efficiency than a a countries the above mentioned to dfm ff projection model is able to address realistic circumstances and requirements in an operational sustainability strategy for efficiency improvement in inefficient countries in the a a region

the economic role of commodity storage one of the earliest and most successful exainples of economic policy is the oftquoted biblical account of joseph s interpretation of the pharoah s dream joseph foretold that seven years of abundant harvests would precede seven years of drought and recommended that the pharoah accumulate grain during the good years since that time the central role of storage in stabilising the economy in the face of exogenous disturbances has been obvious but our understanding of the nature of that role has not greatly advanced without divine assistance in forecasting stochastic production the storage decision is considerably more complex than the one joseph faced and the role of storage quite different in fact several commonly held impressions about the role of storage of commodities such as grains are incorrect rather than stabilising production storage actually accentuates its variability rather than causing a mean price preserving decrease or a mean output preserving decrease in the dispersion of price storage generally causes a more complex modification of the distribution of price rather than being most effective at eliminating short falls in consumption storage actually is more effective at eliminating the incidence of exceedingly high consumption in this paper we explore the role of storage in a model where production is stochastic and both production and storage are performed by competitive profitmaximisers who form rational expectations about the returns to their activities we derive the subtle but very important interactions among production price expectations and storage which simpler models cannot capture finally we make a comparative statics assessment of the distributional implications of storage these results while confirming the importance of the specification of the demand function and the supply elasticity identified in recent analytical studies e g wright i979 and newbery and stiglitz i979 are surprisingly favourable to consumers considering the asymmetric nature of the effects of storage on consumption and price storage is simply a productive activity one that transfers a commodity from one period to the next like other forms of production it is costly the total cost of storing an amount st from period t to period t i is as of period t i

towards a theory of famine relief policy abstract this paper examines how famine mortality is related to the distribution of food consumption a theoretical model is proposed of how individual survival chances are affected by changes in consumption uncertainty in survival prospects arises from the errors made by any observer in assessing health at given current consumption the theory is used to explore two policy issues in famine relief the choice of budgetary rules for allocating emergency aid and the case for price stabilization policies during famines applications to data for two famines in south asia suggest that successful price stabilization would have had substantial benefits in reducing mortality

search price setting and inflation a model of monopolistic competition in an inflationary environment is developed which embodies optimal sequential search price dynamics and entry on the part of consumers and firms respectively equilibrium price strategies are s s these bounds increase continuously with consumer search costs and so does price dispersion indeed the whole equilibrium varies smoothly from the competitive bertrand to the monopolistic diamond 1971 end of the spectrum the latter s paradoxical result is explained as a limiting case where frictions on firms side of the market price adjustment costs but not on buyers search costs tend to zero a positive relationship between smooth and perfectly anticipated inflation and price dispersion or uncertainty is established

the performance of rice markets in bangladesh during the 1974 famine recent discussions have further emphasised the role of speculation in foodgrains as a cause of famine hartmann and boyce i 979 sobhan i 980 rashid i 980 sen i98i greenough i982 by this reasoning famine is attributed to the expectation on the part of foodgrain stockholders of a substantial future price increase or future rationing there is a weakness in this explanation as arrow remarks in his review of sen i98i

relative price variability and inflation a disaggregated analysis relative price variability has been studied at the cross sectional intermarket level this paper addresses the equally important phenomenon of intramarket variability the dispersion of commodity price movements around the industry average using quarterly price data for 80 disaggregated commodity groups in the united kingdom from 1974 to 1984 the paper investigates the determinants of intramarket price variability and replicates some previous crosssectional tests for the united kingdom intermarket price variability is found to be positively related to inflation which confirms previous results for the united states and other countries intramarket variability is found to be positively related to the average market rate of price change but the strength of this relationship appears to be inversely related to the level of industry concentration these results generally support the propositions and findings reported by stigler and kindahl

inflation and efficiency in search markets this paper examines how inflation affects efficiency and output in monopolistically competitive search markets it formalizes the conventional wisdom linking higher inflation price dispersion and increased resources devoted to search it also brings to light the induced exit of arms which reduces rent dissipation but the most important effect of inflation is how it alters the distribution of real transactions prices whether this reduces or promotes efficiency and output is shown to depend critically on preferences and market structure and especially on whether search costs are large or small relative to consumer surplus

price dynamics and market segmentation scrutinizing hundreds of tar models we examine the persistence of price dynamics across market segments using a unique dataset of monthly actual product prices of 47 items collected from three different market segments in istanbul over 1993 01 2008 12 we provide evidence that the extent of price persistence differs across market segments while the half life estimates do not

sticky prices and costly credit we develop a theory of money and credit as competing payment instruments then put it to work in applications agents use cash and credit because the former latter is subject to the inflation tax transaction costs frictions that make the choice of payment method interesting also imply equilibrium price dispersion we derive closed form solutions for money demand and show how to simultaneously account for the price change facts cash credit shares in micro data and money interest correlations in macro data the effects of inflation on welfare price dispersion and markups are discussed as are nonstationary equilibria with dynamics in the price distribution

the efficient estimation of econometric models with rational expectations the efficient estimation of econometric models with rational expectations by the substitution method usually entails the use of a non linear simultaneous equations estimator and hence is not very attractive computationally it is shown that for a wide class of problems efficient estimates can also be obtained with standard estimation methods if instead an errors in variables approach is used for many other problems although not providing fully efficient estimates because rationality is not imposed the errors in variables method will still have a strong appeal because otherwise it uses all of the structural information in the model unlike the substitution method when an incomplete information set is used it guarantees consistent estimates and it is easy to compute

implications of rational inattention abstract a constraint that actions can depend on observations only through a communication channel with finite shannon capacity is shown to be able to play a role very similar to that of a signal extraction problem or an adjustment cost in standard control problems the resulting theory looks enough like familiar dynamic rational expectations theories to suggest that it might be useful and practical while the implications for policy are different enough to be interesting

a two season agricultural household model of output and price uncertainty abstract this paper presents a two season model of a household s production consumption labor supply and storage decisions in an environment of output and price risk the analytical results in this study are markedly different from those of models prevalent in the mainstream of the agricultural household literature the empirical analysis that uses panel data from a village in india provides support for the theoretical results and underscores the seasonal dimension of the farmers choice problems the results also show that ignoring risk or risk averse preferences may introduce substantial downward bias in optimal response estimates

improvements by analyzing the efficient frontier in dea abstract in this paper we suggest four types of improvements for making inefficient dmus efficient in the ccr model with the minimal change of input and output values moreover we propose an algorithm for calculating such improvements by applying quadratic programming techniques furthermore since all equations constructing the efficient frontiers of the ccr and bcc models are necessary to execute the algorithm we present a procedure for calculating them

nonlinear impact of inflation on relative price variability using a half a century long disaggregated price data for 22 food products collected from 19 cities we show that the association between inflation and price variability is nonlinear with respect to changes in inflation rate we obtain similar results for expected and unexpected inflation

the prebisch singer hypothesis a reappraisal independent of stationarity hypotheses time series behaviour of the relative price of primary commodities raul prebisch i950 and hans singer i950 believed that the long term trend of primary commodity prices was negative the latter in an interesting discussion of the above quandary pp 482 3 viewed rises in primary commodity prices as purely temporary sources of surplus that offered short lived opportunities to increase industrial investment these opportunities were missed by private investors who instead increased primary sector investment in such circumstances because all private activity tends to be governed by the price