[Journal:] Managerial and Decision Economics [ISSN:] 1099-1468 [Volume:] 28 [Issue:] 7 (Special Issue: Price Rigidity and Flexibility: New Empirical Evidence) [Pages:] 639-647
The marketplace, along with its price system, is the single most important institution in a western‐style free enterprise economy. The ability of prices to adjust to changes in supply and demand conditions enables the market to function efficiently, and that ability lies behind the magical invisible hand mechanism. The behaviour of prices and in particular the ability of prices to adjust to changes in market conditions, therefore, have fundamental implications for many key issues in many areas of both microeconomics as well as macroeconomics. It is, therefore, critical to study and understand whether there are barriers to price adjustments, what are the nature of these barriers, how the barriers lead to price rigidity, what are the possible implications of these rigidities, etc. This introductory essay briefly summarizes the 14 empirical studies of price rigidity that are included in this special issue.
Price Rigidity Price Flexibility Cost of Price Adjustment Menu Cost Managerial and Customer Cost of Price Adjustment Pricing Price System Price Setting New Keynesian Economics Store-Level Data Micro-Level Data