Fixed Production Capacity, Menu Cost and the Output–Inflation Relationship
Bibliographic Data
| ID | 9727561 |
|---|---|
| Authors | Leif Danziger (0000-0001-7261-232X, Ben-Gurion University of the Negev), Claus Thustrup Kreiner (0000-0001-6421-492X, University of Copenhagen) |
| Year | 2002 |
| Volume | 69 |
| Issue | 275 |
| Pages | 433-444 |
| Publication date | 2002-08-01 |
| Peer Reviewed | Yes |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | Economica (JOURNAL) |
| Journal identifiers | ISSN: 0013-0427 • E-ISSN: 1468-0335 |
| Publisher | Wiley (PUBLISHER • GB) |
| DOI | 10.1111/1468-0335.00292 |
| OpenAlex | W2026720890 |
| Language | EN |
| Citations received | 1 |
This paper analyses the impact of inflation when firms face frictions in both price and quantity adjustments. A vast literature examines the consequences of price‐adjustment costs assuming frictionless quantity adjustments. However, temporary quantity adjustments may be expensive, for example because continual adjustments of the optimal production plant are impossible. Moreover, recent findings suggest that frictions in quantity adjustment may remove the linkage between output and inflation. In this paper we show that this is not the case when inflation is anticipated. On the contrary, a predetermined production capacity may significantly amplify the consequences of price adjustment costs
Capacity utilization · Econometrics · Economics · Fixed cost · Inflation (cosmology) · Linkage (software) · Microeconomics · Monetary economics · Production (economics) · Relative price · Economic Growth and Productivity · Economic theories and models · Monetary Policy and Economic Impact
| Unique citing works | 1 |
|---|---|
| Citations per year | 0,06 |
| Citation span | 2010 - 2010 (1) |
| Citation velocity | historical |
| Highly cited | No |
| Citation types | Neutral: 1 |