Asking About Prices: A New Approach to Understanding Price Stickiness

Title Page, Copyright, Dedication

Asking About Prices Asking About Prices A New Approach to Understanding Price Stickiness Alan S. Blinder Elie R. D. Canetti David E. Lebow Jeremy B. Rudd Russell Sage Foundation New York The Russell Sage Foundation The Russell Sage Foundation, one of the oldest of America's general purpose foundations, was established in 1907 by Mrs. Margaret Olivia Sage for "the improvement of sodal and living conditions in the United States." The Foundation seeks to fulfill this mandate by fostering the development and dissemination of knowledge about the country's political, sodal, and economic problems. While the Foundation endeavors to assure the accuracy and objectivity of each book it publishes, the conclusions and interpretations in Russell Sage Foundation publications are those of the authors and not of the Foundation, its Trustees, or its staff. Publication by Russell Sage, therefore, does not imply Foundation endorsement. Alan S. Blinder Joel E. Cohen Robert E. Denham Phoebe C. Ellsworth BOARD OF TRUSTEES Peggy C. Davis, Chair Timothy A. Hultquist Ira Katznelson Ellen Condliffe Lagemann John S. Reed Jennifer L. Hochschild Neil J. Smelser Eugene Smolensky Harold Tanner Marta Tienda Eric Wanner William Julius Wilson Library of Congress Cataloging-in-Publication Data Asking about prices : a new approach to understanding price stickiness I Alan S. Blinder ... ret al.]. p. cm. Includes bibliographical references and index. ISBN 0-87154-121-1 1. Prices-Mathematical models. 2. Business cyclesMathematical models. I. Blinder, Alan S. HB221.A76 1998 97-26536 338.5'2-<1c21 CIP Copyright © 1998 by Russell Sage Foundation. All rights reserved. Printed in the United States of America. No part of this publication may be reproduced , stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Reproduction by the United States Government in whole or in part is permitted for any purpose. The paper used in this publication meets the minimum requirements of American National Standard for Information Sdences-Permanence of Paper for Printed Library Materials. ANSI Z39.48-1992. RUSSELL SAGE FOUNDATION 112 East 64th Street, New York, New York 10021 10 9 8 7 6 5 4 3 2 To Madeline, with love A. S. B. For Beth, without whom nothing would be possible, and for Chloe and Hannah, for whom everything is possible E. R. D. C. To Coletta, Jeremy, and Meg D. E. 1. For Rochelle and Heineken J. B. R. ...