Closed and Open Economy Models of Business Cycles With Marked Up Sticky Prices  

Oleh:

Barro, Robert J. ; Tenreyro, Silvana

Jenis: Article from Journal - ilmiah internasional
Dalam koleksi: The Economic Journal (EBSCO) vol. 116 no. 511 (2006), page 434-456.
Topik: economy; economy; business; cycles; sticky prices
Fulltext: 434.pdf (171.72KB)

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Perpustakaan Pusat (Semanggi) Nomor Panggil: EE28.22 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

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Isi artikel

Shifts in the extent of competition, which affect markups, are possible sources of aggregate fluctuations. Markups are countercyclical ; during booms the economy operates more efficiently. In our benchmark model, markups correspond to the prices of differentiated inputs relative to that of undifferentiated final product. If nominal prices of differentiated goods are relatively sticky, unexpected inflation reduces markups, mimicking the effects of increased competition. Similar effects stem from reductions in markups of foreign intermediates and unexpected inflation abroad. The models imply that prices of less competitive goods are more countercyclical. We find support for this hypothesis using data of four - digit manufacturing industries.

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