TY  - JOUR
AU  - McCallum,Bennett T.
TI  - A Semi-Classical Model of Price Level Adjustment
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 4706
PY  - 1995
Y2  - August 1995
UR  - http://www.nber.org/papers/w4706
L1  - http://www.nber.org/papers/w4706.pdf
N1  - Author contact info:
Bennett T. McCallum
Tepper School of Business, Posner 256
Carnegie Mellon University
Pittsburgh, PA 15213
Tel: 412/268-2347
Fax: 412/268-6830
E-Mail: bm05@andrew.cmu.edu
AB  - This paper investigates the theoretical and empirical properties of a model of aggregate supply behavior that was introduced in the 1970s but has received inadequate attention.  The model postulates that price changes occur so as to gradually eliminate discrepancies between actual and market-clearing values and to reflect expected changes in market-clearing values.  Its implications are more 'classical' than most alternative formulations that reflect gradual price adjustment.  Empirical results, which utilize a proxy for market-clearing output that is a function of fixed capital and the real price of oil, are moderately encouraging but not entirely supportive.
ER  -