(S,s) pricing : does the heterogeneity wipe out the asymmetry on micro level?

Zakaria Babutsidze

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. -- (S,s) pricing ; heterogeneity ; asymmetry ; four-state shocks

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Year of publication:	2010
Authors:	Babutsidze, Zakaria
Publisher:	[Kiel : Kiel Inst. for the World Economy]
Subject:	Preisrigidität \| Price stickiness \| Monopolistischer Wettbewerb \| Monopolistic competition \| Preismanagement \| Pricing strategy \| Schock \| Shock \| Geldpolitik \| Monetary policy \| Konjunktur \| Business cycle \| Anpassungskosten \| Adjustment costs \| Theorie \| Theory