IDEAS home Printed from https://ideas.repec.org/a/bla/econom/v55y1988i218p203-17.html
   My bibliography  Save this article

Price Inertia in a Macroeconomic Model of Monopolistic Competition

Author

Listed:
  • van de Klundert, Th
  • Peters, P

Abstract

This paper discusses the consequences of price setting by firms under monopolistic competitio n in dynamic models. It is assumed that costs of price adjustment are speed dependent. The Keynesian regime prevails when firms choose a p oint on the demand curve. If real labor costs are relatively high, cu stomers may be rationed. After analyzing firm behavior in a partial e quilibrium setting, demand is made endogenous in a full-scope macroec onomic model. Numerical examples are worked through by applying the t echnique of multiple shooting. It is found that relatively small cost s of price adjustment give rise to substantial macroeconomic effects. Copyright 1988 by The London School of Economics and Political Science.

Suggested Citation

  • van de Klundert, Th & Peters, P, 1988. "Price Inertia in a Macroeconomic Model of Monopolistic Competition," Economica, London School of Economics and Political Science, vol. 55(218), pages 203-217, May.
    • Handle: RePEc:bla:econom:v:55:y:1988:i:218:p:203-17
    as

    Download full text from publisher

    File URL: http://links.jstor.org/sici?sici=0013-0427%28198805%292%3A55%3A218%3C203%3APIIAMM%3E2.0.CO%3B2-2&origin=repec
    File Function: full text
    Download Restriction: Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. van de Klundert, Theo C. M. J. & van Schaik, Anton B. T. M., 1990. "Unemployment persistence and loss of productive capacity: A Keynesian approach," Journal of Macroeconomics, Elsevier, vol. 12(3), pages 363-380.
    2. Springer, K.A., 1989. "Wage rigidity and the persistence of unemployment," Serie Research Memoranda 0041, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
    3. Carlos Borondo, 1994. "La rigidez nominal de los precios de la Nueva Economía Keynesiana: una panorámica," Investigaciones Economicas, Fundación SEPI, vol. 18(2), pages 245-288, May.
    4. van de Klundert, T.C.M.J. & van Schaik, A.B.T.M., 1989. "Unemployment persistence and loss of productive capacity : A Keynesian approach," Other publications TiSEM c0b1af87-3e70-4128-8c48-c, Tilburg University, School of Economics and Management.
    5. van de Klundert, T.C.M.J., 1987. "A macroeconomic two-country model with price-discriminating monopolists," Research Memorandum FEW 279, Tilburg University, School of Economics and Management.
    6. van de Klundert, T.C.M.J. & van Schaik, A.B.T.M., 1990. "Unemployment persistence and loss of productive capacity : A Keynesian approach," Other publications TiSEM 186d7b1e-4d04-4728-b807-d, Tilburg University, School of Economics and Management.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:econom:v:55:y:1988:i:218:p:203-17. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley-Blackwell Digital Licensing or Christopher F. Baum (email available below). General contact details of provider: https://edirc.repec.org/data/lsepsuk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.