Technical Report Product Cycles and Prices : Search Foundation

Teranishi, Yuki

This paper develops a price model with search foundation based on product cycles and prices. Observations conclude that firms match with a new product, then set a new price with negotiation and fix the price until the product exits from a market. This evident behavior brings a new model of price stickiness as a Search-based Phillips curve. The model includes a New Keynesian Phillips curve with the Calvo mechanism as a special case and describes new features. First, new parameters related to product entry and product exit play important roles for price dynamics. Second, such parameters for price stickiness directly appear on an expected price and lagged price.
2012~2016年度科学研究費補助金[基盤研究(S)]「長期デフレの解明」(研究代表者 東京大学経済学研究科・渡辺努, 課題番号:24223003)

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