Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/206764
Authors: 
Levy, Daniel
Year of Publication: 
2007
Citation: 
[Journal:] Managerial and Decision Economics [ISSN:] 1099-1468 [Volume:] 28 [Issue:] 6 (Special Issue - Price Rigidity and Flexibility: Recent Theoretical Developments) [Pages:] 523-530
Abstract: 
The price system, the adjustment of prices to changes in market conditions, is the primary mechanism by which markets function and by which the three most basic questions get answered: what to produce, how much to produce and for whom to produce. To the behaviour of price and price system, therefore, have fundamental implications for many key issues in microeconomics and industrial organization, as well as in macroeconomics and monetary economics. In microeconomics, managerial economics, and industrial organization, economists focus on the price system efficiency. In macroeconomics and monetary economics, economists focus on the extent to which nominal prices fail to adjust to changes in market conditions. Nominal price rigidities play a particularly important role in modern monetary economics and in the conduct of monetary policy because of their ability to explain short‐run monetary non‐neutrality. The behaviour of prices, and in particular the extent of their rigidity and flexibility, therefore, is of central importance in economics. This introductory essay briefly summarizes the eight studies of price rigidity that are included in this special issue.
Subjects: 
Price Rigidity
Price Flexibility
Cost of Price Adjustment
Menu Cost
Managerial and Customer Cost of Price Adjustment
New Keynesian Economics
Price System
JEL: 
D21
D40
E12
E31
E50
E52
E58
L11
L16
M20
M30
Published Version’s DOI: 
Document Type: 
Article
Document Version: 
Accepted Manuscript (Postprint)

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