TY - UNPB
T1 - On the Output-Inflation Relationship When Price and Quantity Adjustments are Costly
AU - Danziger, Leif
AU - Kreiner, Claus Thustrup
N1 - JEL Classification: E31
PY - 2000
Y1 - 2000
N2 - A vast literature analyzes the real effects of price-adjustment costs assuming that quantity adjustments are costless. In this paper, we analyze whether the presence of quantity-adjustments costs, which presumably are significant, change the traditional results on the impact of inflation. In particular, recent findings suggest that quantity-adjustment costs may remove the linkage between output and inflation. We show that this is not the case when inflation is anticipated. On the contrary, quantity-adjustment costs may significantly amplify the consequences of price-adjustment costs
AB - A vast literature analyzes the real effects of price-adjustment costs assuming that quantity adjustments are costless. In this paper, we analyze whether the presence of quantity-adjustments costs, which presumably are significant, change the traditional results on the impact of inflation. In particular, recent findings suggest that quantity-adjustment costs may remove the linkage between output and inflation. We show that this is not the case when inflation is anticipated. On the contrary, quantity-adjustment costs may significantly amplify the consequences of price-adjustment costs
M3 - Working paper
BT - On the Output-Inflation Relationship When Price and Quantity Adjustments are Costly
PB - University of Munich
ER -