Inflation and Market Structure 1967-1973

  title={Inflation and Market Structure 1967-1973},
  author={Phillip D. Cagan},
A variety of theories have been offered to explain why prices generally respond so little to declines in demand, and do so now less than formerly. Most of these center around a dependence of prices on costs, or the anticipated trend of costs, and a greater disregard for short-run changes in demand. The more appealing hypothesis is the simple one that price setters tend to adjust slowly to changes in market conditions; they transmit but do not originate inflation. To find that prices in the less… CONTINUE READING


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