Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/36659 
Year of Publication: 
2010
Series/Report no.: 
Economics Discussion Papers No. 2010-19
Publisher: 
Kiel Institute for the World Economy (IfW), Kiel
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
heterogeneity
asymmetry
four-state shocks
JEL: 
E31
E37
Creative Commons License: 
cc-by-nc Logo
Document Type: 
Working Paper

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