Inflation, search costs and price dispersion

Jacob Paroush

doi:10.1016/0164-0704(86)90064-9

Inflation, search costs and price dispersion

Jacob Paroush

Department of Economics

Research output: Contribution to journal › Article › peer-review

3 Scopus citations

Abstract

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 language	English
Pages (from-to)	329-336
Number of pages	8
Journal	Journal of Macroeconomics
Volume	8
Issue number	3
DOIs	https://doi.org/10.1016/0164-0704(86)90064-9
State	Published - 1986

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Inflation, search costs and price dispersion

Abstract

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