| Popis: |
By lots of economists and central banks, price stickiness is believed to be the main factor which brings about the non-neutrality of money. Based on the belief, most of the New Keynesian models are developed to feature price stickiness in order to make the real effect of money. Among those, the Calvo pricing has been the most popular framework in featuring the sticky price. This thesis investigates whether the non-neutrality of money is always guaranteed by the Calvo-type price stickiness or not. In particular, the focus lies on the effect of volatility of firms’' optimal prices on the relationship between price stickiness and the non-neutrality of money. Chapter 1 presents the theoretical possibility of the non-relationship between the two phenomenons in such case that repricing firms’' optimal prices are very volatile, and the following two chapters propose more micro-founded endogenous frameworks to deliver the results which support the argument in Chapter 1.\ud \ud It is shown in Chapter 1 that high volatility of reset prices has the same effect as that of lowering the degree of price stickiness and increasing the future discount factor in the standard Calvo framework. Due to the effect, it can be illustrated that the aggregate price level can be flexible even when some firms’ maintain the previous price level if the other repricing firms' prices respond very elastically to monetary shocks. Chapter 2 proposes a model in which repricing firms’ behave as in collusion and exploit the information on aggregate price dynamics by taking the aggregate price as a function of their own price at the process of optimization. It is shown that the colluding firms set much higher prices for monopoly gains against positive monetary shocks, and therefore, the aggregate price level can be very responsive even with price stickiness of the rms. Lastly, Chapter 3 presents the case where firms have no information on other firms' pricing behaviours and have expectations on average reset price with bounded rationality. The model of this chapter demonstrates that the realized level of average reset price of the firms can be much higher than that of the standard model when their expectations are heterogeneous.\ud \ud All the results of the chapters imply that the monetary policy might not be able to have the real effect even with price stickiness if firms’ reset prices show very volatile movements. Therefore, economists and central banks should research more on the volatility of firms' reset prices when analysing monetary policy and also try to find other factors which might have direct relationship with the rigidity of aggregate price, rather than price stickiness which focuses just on individual prices, when developing a monetary model.\ud |
