Arbeitspapier

Sectoral inflation persistence, market concentration and imperfect common knowledge

Previous studies have stressed that in ation dynamics exhibit a substantial disper- sion across sectors. Using US producer price data, we present evidence that sectoral in ation persistence is negatively correlated with market concentration, which is diffi- cult to reconcile with the prediction of the standard model of monopolistic competition. To explain the data, we incorporate imperfect common knowledge into the monopolistic competition model introduced by Melitz and Ottaviano (2008). In the model, strategic complementarity among firms increases as market concentration decreases. Because higher strategic complementarity generates greater in ation persistence, our model suc- cessfully replicates the observed negative correlation between in ation persistence and market concentration across sectors.

Sprache
Englisch

Erschienen in
Series: ISER Discussion Paper ; No. 1082

Klassifikation
Wirtschaft
Price Level; Inflation; Deflation
Market Structure, Pricing, and Design: General
Industrial Organization and Macroeconomics: Industrial Structure and Structural Change; Industrial Price Indices
Thema
Imperfect common knowledge
Ination persistence
Market concentra-tion

Ereignis
Geistige Schöpfung
(wer)
Kato, Ryo
Okuda, Tatsushi
Tsuruga, Takayuki
Ereignis
Veröffentlichung
(wer)
Osaka University, Institute of Social and Economic Research (ISER)
(wo)
Osaka
(wann)
2020

Handle
Letzte Aktualisierung
10.03.2025, 11:42 MEZ

Datenpartner

Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.

Objekttyp

  • Arbeitspapier

Beteiligte

  • Kato, Ryo
  • Okuda, Tatsushi
  • Tsuruga, Takayuki
  • Osaka University, Institute of Social and Economic Research (ISER)

Entstanden

  • 2020

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