This paper studies, in a model of entry deterrence, conditions under which a small cost of changing nominal prices combined with a real rigidity leads to a large nominal rigidity. The entry deterrence environment, which generates the real rigidity, provides an appealing explanation as to why...

We study the behavior of price dispersion in Poland following the big-bang transition to a market economy in 1990 using a large, disaggregated data set. Intra- and intermarket dispersions fall rapidly in the early stages of transition. This is not fully explained by changes in inflation or in...

We analyse welfare effects of the interactions between the tax system and inflation in Poland and in Ukraine, using the framework developed by Feldstein (1997, 1999).This approach stresses the fact that inflation increases distortions created by the tax system, in particular distortions to...