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Customer flows, countercyclical markups, and the persistent effects of monetary shocks Author info | Abstract | Publisher info | Download info | Related research | Statistics Peter N. Ireland
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This paper develops a general equilibrium model in which households face fixed costs associated with searching for a new supplier of consumption goods. These search costs provide firms with some monopoly power over their existing customers and generate the kind of customer flow dynamics first considered by Phelps and Winter. Customer flows, in turn, cause markups of price over marginal cost to vary countercyclically, both amplify and propagate the effects of technology shocks on output, and allow the effects of monetary shocks on output to persist.
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Paper provided by Federal Reserve Bank of Richmond in its series Working Paper with number
95-04.
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Date of creation: 1995Date of revision:
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Keywords: Business cycles ; Prices ; References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile , click on "citations" and make appropriate adjustments.:
Bils, Mark, 1987.
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American Economic Review ,
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[Downloadable!] (restricted)
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[Downloadable!] (restricted)
Other versions: Julio J. Rotemberg & Michael Woodford, 1991.
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NBER Chapters ,
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[Downloadable!]
Feldman, Mark & Gilles, Christian, 1985.
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[Downloadable!] (restricted)
Taylor, John B, 1980.
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[Downloadable!] (restricted)
Judd, Kenneth L., 1985.
"The law of large numbers with a continuum of IID random variables ,"
Journal of Economic Theory ,
Elsevier, vol. 35(1), pages 19-25, February.
[Downloadable!] (restricted)
Wright, Randall, 1986.
"Job Search and Cyclical Unemployment ,"
Journal of Political Economy ,
University of Chicago Press, vol. 94(1), pages 38-55, February.
[Downloadable!] (restricted)
Robert E. Hall, 1975.
"The Rigidity of Wages and the Persistence of Unemployment ,"
Brookings Papers on Economic Activity ,
Economic Studies Program, The Brookings Institution, vol. 6(1975-2), pages 301-350.
[Downloadable!]
Howitt, Peter, 1988.
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The Quarterly Journal of Economics ,
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[Downloadable!] (restricted)
Ball, Laurence & Romer, David, 1990.
"Real Rigidities and the Non-neutrality of Money ,"
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[Downloadable!] (restricted)
Other versions: Tobin, James, 1977.
"How Dead Is Keynes? ,"
Economic Inquiry ,
Oxford University Press, vol. 15(4), pages 459-68, October.
Other versions: Cogley, Timothy & Nason, James M, 1995.
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American Economic Review ,
American Economic Association, vol. 85(3), pages 492-511, June.
[Downloadable!] (restricted)
Other versions: Lucas, Robert Jr., 1972.
"Expectations and the neutrality of money ,"
Journal of Economic Theory ,
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[Downloadable!] (restricted)
Gottfries, Nils, 1986.
" Price Dynamics of Exporting and Import-Competing Firms ,"
Scandinavian Journal of Economics ,
Blackwell Publishing, vol. 88(2), pages 417-36.
Blinder, Alan S. & Fischer, Stanley, 1981.
"Inventories, rational expectations, and the business cycle ,"
Journal of Monetary Economics ,
Elsevier, vol. 8(3), pages 277-304.
[Downloadable!] (restricted)
Other versions:
Alan S. Blinder & Stanley Fischer, 1982.
"Inventories, Rational Expectations, and the Business Cycle ,"
NBER Working Papers
0381, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted) A. S. Blinder & S. Fischer, 1978.
"Inventories, Rational Expectations, and the Business Cycle ,"
Working papers
220, Massachusetts Institute of Technology (MIT), Department of Economics.
Olivier J. Blanchard, 1982.
"Price Asynchronization and Price Level Inertia ,"
NBER Working Papers
0900, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted)
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