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Title:(S,s) pricing: Does the heterogeneity wipe out the asymmetry on micro level? PDF Logo
Authors:Babutsidze, Zakaria
Issue Date:2010
Series/Report no.:Economics Discussion Papers 2010-19
Abstract:This paper presents a model of asymmetric (S,s) pricing. We investigate whether the asymmetry on micro level is carried over on macro level and what is the role of agent heterogeneity in the process. We look at two kinds of asymmetries: (i) asymmetric output responses monetary shocks and (ii) asymmetric responses to shocks during different phases of business cycle. We conclude that the first type of asymmetry can be attributed to the differences in adjustment bands and that heterogeneity softens this effect. The second type of asymmetry is the result of pricing behavior, thus of agent heterogeneity itself.
Subjects:(S,s) pricing
four-state shocks
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Document Type:Working Paper
Appears in Collections:Economics: The Open-Access, Open-Assessment E-Journal - Discussion Papers

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