Economics, Econometrics and Finance
4 years ago

Small price changes could lead to big impacts on economy and welfare

2 views
National Bureau of Economic Research
Monopolistic Competition, Aggregate Demand Externalities and Real Effects of Nominal Money
Olivier Blanchard, Nobuhiro Kiyotaki

Paper Summary

The article explores how competition and demand affect the economy. It shows that in competitive markets, changes in demand can have big impacts on output and well-being. This is because small costs of adjusting prices can lead to significant effects on the economy.

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