All Rights Reserved
AccessEcon LLC 2006, 2008.
Powered by MinhViet JSC
ralph lauren polo

Franck Portier
''Menu costs, (s,S) rule, imperfect information and the neutrality of money''
( 2004, Vol. 5 No.7 )
A dynamic macroeconomic model of monopolistic competition and imperfect information with menu costs and (s,S) pricing rule is proposed, in the lines of Caballero and Engel [1991]. The model can be seen as an imperfect competition version of Lucas [1973] with menu costs. The presence of informational imperfection destroys the neutrality result of Caplin and Spulber [1987], and the effect of a monetary shock on output is shown to be an increasing function of the degree of strategic complementarity between firms.
JEL: E3 - Prices, Business Fluctuations, and Cycles: General (includes Measurement and Data)
Manuscript Received : Apr 06 2004 Manuscript Accepted : Apr 12 2004

  This abstract has been downloaded 2593 times                The Full PDF of this paper has been downloaded 142584 times