Finance and Economics Discussion Series - Factor Intensity and Price Rigidity: Evidence and Theory (Paperback)


This paper establishes a new empirical finding: the degree of labor intensity and the degree of price flexibility are negatively correlated across industrial sectors. I model this in an economy with staggered nominal wage contracts and production sectors that differ in labor and capital intensities. Nominal disturbances affect capital-intensive and labor-intensive sectors asymmetrically: prices of labor-intensive goods change less than do prices of capital-intensive goods. In addition, when prices are costly to adjust, more firms in the capital-intensive sectors optimally choose to update their prices than firms in the labor-intensive sectors. Thus, varying factor intensity generates different degrees of price stickiness across sectors that face the same degree of wage rigidity.

R338
List Price R421
Save R83 20%

Or split into 4x interest-free payments of 25% on orders over R50
Learn more

Discovery Miles3380
Delivery AdviceOut of stock

Toggle WishListAdd to wish list
Review this Item

Product Description

This paper establishes a new empirical finding: the degree of labor intensity and the degree of price flexibility are negatively correlated across industrial sectors. I model this in an economy with staggered nominal wage contracts and production sectors that differ in labor and capital intensities. Nominal disturbances affect capital-intensive and labor-intensive sectors asymmetrically: prices of labor-intensive goods change less than do prices of capital-intensive goods. In addition, when prices are costly to adjust, more firms in the capital-intensive sectors optimally choose to update their prices than firms in the labor-intensive sectors. Thus, varying factor intensity generates different degrees of price stickiness across sectors that face the same degree of wage rigidity.

Customer Reviews

No reviews or ratings yet - be the first to create one!

Product Details

General

Imprint

Bibliogov

Country of origin

United States

Release date

February 2013

Availability

Supplier out of stock. If you add this item to your wish list we will let you know when it becomes available.

First published

February 2013

Authors

Creators

Dimensions

246 x 189 x 3mm (L x W x T)

Format

Paperback - Trade

Pages

64

ISBN-13

978-1-288-70513-9

Barcode

9781288705139

Categories

LSN

1-288-70513-1



Trending On Loot