Dixon, Huw David ![]() |
Abstract
New Keynesian literature assumes symmetric industrial structure when analysing explanations of money non-neutrality. This paper analyses the impact of modifying this assumption by allowing for a mixed industrial structure; some industries are characterized by monopolistic competition, others by perfect competition. The mixed industrial structure implies misallocation of labour between the different industries which may contribute to explanations of non-neutrality of money. Following a 5% money increase, the menu costs needed for non-neutrality may be 40 times smaller and ratio of welfare gain over private loss more than 100 times larger than in the corresponding model with a symmetric structure.
Item Type: | Article |
---|---|
Date Type: | Publication |
Status: | Published |
Schools: | Business (Including Economics) |
Subjects: | H Social Sciences > HB Economic Theory |
Uncontrolled Keywords: | New Keynesian economics; Industrial structure |
Publisher: | Elsevier |
ISSN: | 0014-2921 |
Last Modified: | 24 Oct 2022 12:00 |
URI: | https://orca.cardiff.ac.uk/id/eprint/50057 |
Citation Data
Cited 9 times in Scopus. View in Scopus. Powered By Scopus® Data
Actions (repository staff only)
![]() |
Edit Item |