Business, Management and Accounting
8 years ago

New research challenges traditional economic beliefs on price determinants

Cambridge University Press eBooks
Aggregate–relative confusion: implications for relative price variability
Alex Cukierman

Paper Summary

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The article discusses how changes in the general price level are not completely separate from changes in relative prices. Previous theories suggested that the quantity of money affects all prices equally, but recent evidence shows that changes in relative prices can also impact the general price level. This challenges the traditional view that only real factors determine relative prices.