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Cost of Sticky Prices under Multiple Stages of Production

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  • TOYOICHIRO SHIROTA

Abstract

This study analyzes the cost of sticky prices when intermediate goods are used in production. One major result is that the cost of sticky prices increases as the production structure deepens. A simple one‐sector model without intermediate inputs underestimates the cost of nonzero trend inflation.

Suggested Citation

  • Toyoichiro Shirota, 2021. "Cost of Sticky Prices under Multiple Stages of Production," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 53(5), pages 1211-1222, August.
    • Handle: RePEc:wly:jmoncb:v:53:y:2021:i:5:p:1211-1222
    DOI: 10.1111/jmcb.12786
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