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Inventories, Markups, and Real Rigidities in Menu Cost Models

  • Virgiliu Midrigan

    (New York University)

  • Oleksiy Kryvtsov

    (Bank of Canada)

We examine the general equilibrium implications of an Aguirregabiria (1999) - type economy, in which firms are subject to fixed cost of price- and inventory-adjustment that is capable of generating infrequent orders and price changes observed in the data. We ask whether the model can account for patterns of temporal price variation, frequency of stockouts, etc. in the micro data and study the response of real activity to monetary disturbances in an otherwise standard (S,s) setup.

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Paper provided by Society for Economic Dynamics in its series 2008 Meeting Papers with number 487.

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Date of creation: 2008
Date of revision:
Handle: RePEc:red:sed008:487
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Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA

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  33. Kryvtsov, Oleksiy & Midrigan, Virgiliu, 2010. "Inventories and real rigidities in New Keynesian business cycle models," Journal of the Japanese and International Economies, Elsevier, vol. 24(2), pages 259-281, June.
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