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On Endogenously Staggered Prices

Author

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  • V. Bhaskar

    (Department of Economics, University of Essex, Colchester CO4 3SQ, UK)

Abstract

064 Taylor's model of staggered contracts is an influential explanation for nominal inertia and the persistent real effects of nominal shocks. However, in standard imperfect competition models, if agents are allowed to choose the timing of pricing decisions, they will typically choose to synchronize. This paper provides a simple model of imperfect competition which produces stable staggering. Our argument relies on strategic interaction at two levels --- between firms within an industries, and across industries --- and produces a continuum of stable staggered price equilibria.

Suggested Citation

  • V. Bhaskar, 1998. "On Endogenously Staggered Prices," Macroeconomics 9809007, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwpma:9809007
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    References listed on IDEAS

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    More about this item

    Keywords

    Staggered contracts; monopolistic competition; coordination failures;
    All these keywords.

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

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