TY  - JOUR
AU  - Ball,Laurence
AU  - Romer,David
TI  - Real Rigidities and the Non-Neutrality of Money
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 2476
PY  - 1990
Y2  - July 1990
UR  - http://www.nber.org/papers/w2476
L1  - http://www.nber.org/papers/w2476.pdf
N1  - Author contact info:
Laurence M. Ball
Department of Economics
Johns Hopkins University
Baltimore, MD 21218
Tel: 410/516-7605
Fax: 410/516-7600
E-Mail: lball@jhu.edu

David H. Romer
Department of Economics
University of California, Berkeley
Berkeley, CA 94720-3880
E-Mail: dromer@econ.berkeley.edu
AB  - Rigidities in real prices are not sufficient to create rigidities in nominal prices and real effects of nominal shocks. And, by themselves, small frictions in nominal adjustment, such as costs of changing prices, create only small non-neutralities. But this paper shows that substantial nominal rigidity can arise from a combination of real rigidities and small nominal frictions. The paper shows the connection between real and nominal rigidity given the presence of nominal frictions both in general and for several specific sources of real rigidity: costs of adjusting real prices, asymmetric demand arising from imperfect information, and efficiency wages.
ER  -