search query: @author Tommasi, M. / total: 3
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| Author: | Tommasi, M. |
| Title: | The consequences of price instability on search markets: toward understanding the effects of inflation |
| Journal: | American Economic Review
1994 : DEC, VOL. 84:5, p. 1385-1396 |
| Index terms: | PRICES INFLATION MARKETS |
| Language: | eng |
| Abstract: | Real price variability deprecates the information about future prices contained in current ones. Repeat-purchase customers have, then, less incentive to acquire price information. The fact that consumers are less well informed allows firms to increase their markups and permits inefficient producers to increase their sales. Production gets reallocated toward higher-cost firms. Given the well-documented correlation between inflation and relative price variability , these results help explain some of the costs of inflation. |
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