Inflation, search costs and price dispersion

Jacob Paroush

Research output: Contribution to journalArticlepeer-review

3 Scopus citations


This paper assumes that the individual's transaction motive for holding real balances is, at least in part, an input into his search activity for lower prices. By using this assumption along with some basic results from search theory, we prove the existence of positive correlation between inflation rate and price dispersion. Many empirical studies support this result.

Original languageEnglish
Pages (from-to)329-336
Number of pages8
JournalJournal of Macroeconomics
Issue number3
StatePublished - 1986


Dive into the research topics of 'Inflation, search costs and price dispersion'. Together they form a unique fingerprint.

Cite this