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Staggered price setting with endogenous frequency of adjustment

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  • Romer, David

Abstract

The classic models of staggered adjustment of Taylor and Blanchard takes the frequency of price or wage adjustment as exogenous. This paper develops a model in which the frequency of price changes in endogenous. It then uses the model to analyze the effects of changes in the parameters of the economy on the frequency of adjustment and the real effects of monetary shocks.
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Suggested Citation

  • Romer, David, 1990. "Staggered price setting with endogenous frequency of adjustment," Economics Letters, Elsevier, vol. 32(3), pages 205-210, March.
    • Handle: RePEc:eee:ecolet:v:32:y:1990:i:3:p:205-210
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    References listed on IDEAS

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    1. Laurence Ball & David Romer, 1989. "The Equilibrium and Optimal Timing of Price Changes," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 56(2), pages 179-198.
    2. Ball, Laurence Markham, 1987. "Externalities from Contract Length," American Economic Review, American Economic Association, vol. 77(4), pages 615-629, September.
    3. Benabou, Roland, 1989. "Optimal Price Dynamics and Speculation with a Storable Good," Econometrica, Econometric Society, vol. 57(1), pages 41-80, January.
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