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Cost of Sticky Prices under Multiple Stages of Production
Author(s) -
SHIROTA TOYOICHIRO
Publication year - 2021
Publication title -
journal of money, credit and banking
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.763
H-Index - 108
eISSN - 1538-4616
pISSN - 0022-2879
DOI - 10.1111/jmcb.12786
Subject(s) - production (economics) , inflation (cosmology) , economics , production cost , simple (philosophy) , cost structure , monetary economics , econometrics , microeconomics , engineering , mechanical engineering , philosophy , physics , epistemology , theoretical physics
This study analyzes the cost of sticky prices when intermediate goods are used in production. One major result is that the cost of sticky prices increases as the production structure deepens. A simple one‐sector model without intermediate inputs underestimates the cost of nonzero trend inflation.