Abstract
Conventional economic theory assumes a Walrasian pricing mechanism that is known to pose theoretical difficulties. Less well-known is that conventional price theory conflicts with empirical studies of price-setting in industrial firms. Post-Keynesian theory, which assumes mark-up pricing on normal costs and infrequent price changes, is consistent with observation, and we show in this paper that post-Keynesian pricing, unlike conventional pricing, features stable dynamics. We focus on the short run, because post-Keynesian theory posits complex and historically-contingent long-term price dynamics. Specifically, we show that under very general conditions, prices converge to a unique equilibrium price vector.
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Artikel in diesem Heft
- Research Articles
- Optimal Monetary Policy in an Overlapping Generations Model with Search Theoretic Monetary Exchange
- Getting a Job through Unemployed Friends: A Social Network Perspective
- Dynamic Stability of Post-Keynesian Pricing
- A Nonspeculation Theorem with an Application to Committee Design
- Information Acquisition in the Era of Fair Disclosure: An Application of Asymmetric Awareness
- Privatization Neutrality Theorem in Free Entry Markets
- Strong Forward Induction
- The Case of “Less is More”: Modelling Risk-Preference with Expected Downside Risk
- Stability of Equilibrium Outcomes under Deferred Acceptance: Acyclicity and Dropping Strategies
- Notes
- A Height-Based Multidimensional Extension of the Lorenz Preorder for Integer-Valued Distributions
Artikel in diesem Heft
- Research Articles
- Optimal Monetary Policy in an Overlapping Generations Model with Search Theoretic Monetary Exchange
- Getting a Job through Unemployed Friends: A Social Network Perspective
- Dynamic Stability of Post-Keynesian Pricing
- A Nonspeculation Theorem with an Application to Committee Design
- Information Acquisition in the Era of Fair Disclosure: An Application of Asymmetric Awareness
- Privatization Neutrality Theorem in Free Entry Markets
- Strong Forward Induction
- The Case of “Less is More”: Modelling Risk-Preference with Expected Downside Risk
- Stability of Equilibrium Outcomes under Deferred Acceptance: Acyclicity and Dropping Strategies
- Notes
- A Height-Based Multidimensional Extension of the Lorenz Preorder for Integer-Valued Distributions