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Abstract

The marketplace, along with its price system, is the single most important institution in a western-style free enterprise economy. The ability of prices to adjust to changes in supply and demand conditions enables the market to function efficiently, and that ability lies behind the magical invisible hand mechanism. The behaviour of prices and in particular the ability of prices to adjust to changes in market conditions, therefore, have fundamental implications for many key issues in many areas of both microeconomics as well as macroeconomics. It is, therefore, critical to study and understand whether there are barriers to price adjustments, what are the nature of these barriers, how the barriers lead to price rigidity, what are the possible implications of these rigidities, etc. This introductory essay briefly summarizes the 14 empirical studies of price rigidity that are included in this special issue. Copyright © 2007 John Wiley & Sons, Ltd.

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Article provided by John Wiley & Sons, Ltd. in its journal Managerial and Decision Economics.

Volume (Year): 28 (2007)
Issue (Month): 7 ()
Pages: 639-647

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Handle: RePEc:wly:mgtdec:v:28:y:2007:i:7:p:639-647

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Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/7976

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Find related papers by JEL classification:

• E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
• E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General
• M30 - Business Administration and Business Economics; Marketing; Accounting - - Marketing and Advertising - - - General
• D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
• D40 - Microeconomics - - Market Structure and Pricing - - - General
• M20 - Business Administration and Business Economics; Marketing; Accounting - - Business Economics - - - General
• E - Macroeconomics and Monetary Economics

References

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16. Sourav Ray & Haipeng (Allan) Chen & Mark Bergen & Daniel Levy, 2005. "Asymmetric Wholesale Pricing: Theory and Evidence," Working Papers 2005-02, Department of Economics, Bar-Ilan University.
    
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Cited by:

1. Levy, Daniel, 2007. "Price Rigidity and Flexibility: Recent Theoretical Developments," MPRA Paper 2761, University Library of Munich, Germany.
   
   • Daniel Levy, 2007. "Price rigidity and flexibility: recent theoretical developments," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 28(6), pages 523-530.
   • Daniel Levy, 2006. "Price Rigidity and Flexibility: Recent Theoretical Developments," Emory Economics 0608, Department of Economics, Emory University (Atlanta).
2. Daniel Levy & Frank Smets, 2010. "Price setting and price adjustment in some European Union Countries: introduction to the special issue," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 31(2-3), pages 63-66.
   
   • Levy, Daniel & Smets, Frank, 2010. "Price Setting and Price Adjustment in Some European Union Countries: Introduction to the Special Issue," MPRA Paper 27617, University Library of Munich, Germany.
   • Daniel Levy & Frank Smets, 2010. "Price Setting and Price Adjustment in Some European Union Countries: Introduction to the Special Issue," Working Papers 2010-22, Department of Economics, Bar-Ilan University.
3. Christopher Douglas & Ana Mar�a Herrera, 2010. "Why are gasoline prices sticky? A test of alternative models of price adjustment," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 25(6), pages 903-928.

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