Article ID Journal Published Year Pages File Type
9549167 Economics Letters 2005 7 Pages PDF
Abstract
This paper shows that firms' price-setting behaviour determines whether a higher level of competition among firms amplifies or dampens short-run inflationary pressures in the new Keynesian model. When strategic complementarity in pricing decisions prevails, the effect of markup shocks is relatively small.
Keywords
Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
Preview
Price-setting behaviour, competition, and markup shocks in the new Keynesian model
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