Inflation, Output and Labour Productivity When Prices are Changed Infrequently

Hyperbolic Discounting and the Phillips Curve

“…In the context of a state‐dependent menu cost model, Benabou and Konieczny (1994) show how the long‐run Phillips curve trade‐off depends on the asymmetry of the profit function, the convexity of the product demand function, and discounting. Konieczny (1990), Kuran (1986), and Naish (1986) provide non‐neutrality results in a broadly similar vein. Our model, by contrast, has time‐dependent nominal rigidities.…”

On Inflation and Output with Costly Price Changes: A Simple Unifying Result

“…Using (7)- (8) Konieczny (1990) claims that, at low inflation rates, the profit effect is negligible as compared to the demand effect, because the profit function is (log) quadratic, hence symmetric up to a third order approximation. It is clear from (11) and (12) (Danziger (1988), Konieczny (1990) Equations (14)- (15) …”

Nominal Rigidities and the Optimal Rate of Inflation

“…Hence, even though money is neutral, it needs not be super-neutral. This issue has been pursued in a number of papers (Naish (1986), Kuran (1986a,b), Konieczny (1990)), and depending on the properties of the demand, inflation, and cost function and thus the profit function, output may be increasing or decreasing in inflation. Danziger (1988) presents an interesting model where the asymmetry of the profit function implies that the interval for the relative price supported by the firm's price policy is biased downward relative to the optimal relative price in the absence of adjustment costs.…”