Staggered Price Setting with Endogenous Frequency of Adjustment
NBER Working Paper No. 3134
The classic models of staggered adjustment of Taylor and Blanchard takes the frequency of price or wage adjustment as exogenous. This paper develops a model in which the frequency of price changes in endogenous. It then uses the model to analyze the effects of changes in the parameters of the economy on the frequency of adjustment and the real effects of monetary shocks.
Published: Economics Letters, Vol. 32, pp. 205-210, March 1990.