Arbeitspapier

On the Output-Inflation Relationship when Price and Quantity Adjustments are Costly

A vast literature analyzes the real effects of price-adjustment costs assuming that quantity adjustments are costless. In this paper, we analyze whether the presence of quantity-adjustments costs, which presumably are significant, change the traditional results on the impact of inflation. In particular, recent findings suggest that quantity-adjustment costs may remove the linkage between output and inflation. We show that this is not the case when inflation is anticipated. On the contrary, quantity-adjustment costs may significantly amplify the consequences of price-adjustment costs.

Language
Englisch

Bibliographic citation
Series: CESifo Working Paper ; No. 293

Classification
Wirtschaft
Subject
Output-inflation relationship
menu costs
quantity-adjustment costs

Event
Geistige Schöpfung
(who)
Danziger, Leif
Hansen, Claus Thustrup
Event
Veröffentlichung
(who)
Center for Economic Studies and ifo Institute (CESifo)
(where)
Munich
(when)
2000

Handle
Last update
10.03.2025, 11:44 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Danziger, Leif
  • Hansen, Claus Thustrup
  • Center for Economic Studies and ifo Institute (CESifo)

Time of origin

  • 2000

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