Sticky prices
Subtitle: a new monetarist approach
By: Allen Head ... [et al.].
Contributors: National Bureau of Economic Research
Series: NBER working paper series -- working paper 17520; Working paper series (National Bureau of Economic Research : Online) -- working paper no. 17520.
Publisher: National Bureau of Economic Research
Published: 2011
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Description: "Why do some sellers set nominal prices that apparently do not respond to changes in the aggregate price level? In many models, prices are sticky by assumption; here it is a result.  We use search theory, with two consequences: prices are set in dollars, since money is the medium of exchange; and equilibrium implies a nondegenerate price distribution.  When the money supply increases, some sellers may keep prices constant, earning less per unit but making it up on volume, so profit stays constant.  The calibrated model matches price-change data well.  But, in contrast with other sticky-price models, money is neutral"--National Bureau of Economic Research web site.
Notes: Title from PDF file as viewed on 1/5/2012.

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