Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/30317 
Year of Publication: 
2010
Series/Report no.: 
Diskussionsbeiträge No. 2010/2
Publisher: 
Freie Universität Berlin, Fachbereich Wirtschaftswissenschaft, Berlin
Abstract: 
Recent monetary search models emphasize that the real effects of inflation via its impact on price dispersion depend on the level of search costs and, thus, on the level of market integration. For less integrated markets, the inflation-price dispersion nexus is predicted to be asymmetrically V-shaped which implies an optimal inflation rate above zero. For highly integrated markets, however, theory suggests that the impact of inflation on price dispersion disappears. Employing price data of the European Union member states, this paper is the first that empirically tests these implications of monetary search theory.
Subjects: 
Inflation
Relative price variability
Monetary search models
European market integration
JEL: 
E31
C23
ISBN: 
978-3-941240-14-8
Document Type: 
Working Paper

Files in This Item:
File
Size
850.27 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.