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What is Menu Cost Pricing in Multiproduct Firms about?
This paper develops a model for multiproduct firms facing a fixed menu cost for price adjustments, analyzing how this affects price-setting behavior and responses to monetary shocks. The authors derive analytical expressions for the frequency and distribution of price changes, showing that the model can account for observed bell-shaped distributions of price changes when the number of products is sufficiently large. The findings indicate that the size and duration of output responses to monetary shocks incr
- Author
- m66ns57fsg
- Language
- EN