Most of the theoretical literature on price-setting behavior deals with the special case in which only a single price is changed. At the retail-store level, at least, where dozens of products are sold by a single price-setter, price-setting policies are not formulated for individual products....

This paper examines the distribution of output around capacity when money demand is a non-linear function of the nominal interest rate such that nominal interest rates cannot become negative. When fluctuations in output result primarily from disturbances to the money market, the variance of...

This paper investigates the response of the price level to random monetary shocks through a model of the fixed cost of changing a nominal price. It shows that, in an inflationary environment, an expansionary monetary shock is accommodated faster than a contractionary monetary shock. Furthermore,...

This article investigates the dynamic interactions among demographic transition, income distribution, and economic growth. Consistent with empirical evidence we show that fertility and income distribution follow an inverted U-shaped dynamics in the process of economic development. In the first...

This paper analyzes the relationship between technological progress, wage inequality, intergenerational earnings mobility, and economic growth. In periods of major technological inventions, a decline in the relative importance of initial conditions raises inequality, enhances mobility, and...

Theoretical work on price-setting behavior focuses on the single-product case while, in reality, a single price-setter sells many products. The authors use retail store-level multiproduct pricing data to learn about price dynamics. They find that, while the timing of a product's price changes is...

Endogenous-growth theory suggests that technological change tends to reinforce the position of the leading nations. Yet sometimes this leadership role shifts. The authors suggest a mechanism that explains this pattern of 'leapfrogging' as a response to occasional major changes in technology....

Economists have long viewed recessions as contributing to increasing inequality. However, this conclusion is largely based on data from a period in which inequality was increasing over time. This paper examines the connection between long-run trends and cyclical variation in earnings inequality....

This paper analyzes the effects of transitory productivity shocks on long-run output. The study demonstrates that, despite it transitory nature, an adverse productivity shock may result in lower long-run output. A fall in productivity reduces output and savings and, consequently, the interest...