Scandinavian Working Papers in Economics

Working Papers,
Lund University, Department of Economics

No 2008:6: The choice between state- and time-dependent price rules

Klas Fregert ()
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Klas Fregert: Department of Economics, Lund University, Postal: Department of Economics, School of Economics and Management, Lund University, Box 7082, S-220 07 Lund, Sweden

Abstract: Large review costs lead to time-dependent price setting rules. State-dependent rules become more likely when there is an increase in: set-up costs, the variability of the equilibrium price or the efficiency loss associated with being away from equilibrium.

Keywords: time-dependent price rule; state-dependent price rule

JEL-codes: E31; E32

11 pages, March 24, 2008

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