Document Type
Discussion Paper
Publication Date
12-2023
CFDP Number
2374
CFDP Pages
42
Abstract
Why do the prices of some products change little during business cycles while the prices of others vary wildly and tend to rise during economic booms and fall during recessions? In particular, why do the prices of some products not fall or fall only a little when the demand for them declines dramatically. It is not surprising that in highly competitive industries prices fluctuate with shifts in demand and supply, but what explains the stability of prices in markets where firms have more direct control of prices? These questions are central to an understanding of business cycles, and good answers would also help us predict how prices will behave.
Recommended Citation
Bewley, Truman F., "An Interview Study of Pricing" (2023). Cowles Foundation Discussion Papers. 2776.
https://elischolar.library.yale.edu/cowles-discussion-paper-series/2776