Frequent price changes under menu costs

Article Abstract:

The influence of uncertainty on a firm's pricing behavior has been studied using a dynamic menu cost model that results in (S,s)-rules in which the price is within a certain band. Results indicate that greater uncertainty results in a wider zone of inaction but not frequent price changes. This finding suggests there is no falsification of the theory of firms operating under menu costs simply because long periods of fixed prices cannot be obained.

Econometrics & Model Building, Econometrics, Pricing, Prices, Business models

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Sufficient conditions for a class of investment problems

Article Abstract:

Research was conducted to examine the conditions for a class of investment problem that are less restrictive than those found in economic literature. The problem involved the optimal control problem of Bolza-Hestenes in which several functions may not be concave in the control parameters. Results demonstrate that the conditions of the theorem apply to a great variety of problems which are of direct interest to economists.

Investments

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On H infinity criteria for macroeconomic policy evaluation

Article Abstract:

The H infinity theory is discussed in relation to its use in macroeconomic decisionmaking. As a method in the control of systems characterized by uncertainty, the H infinity theory models uncertainty as both a consequence of inadequate system knowledge and an external uncontrollable force. It is applied to a dynamic variant of the multiplier-accelerator first proposed by Maynard Keynes.

Evaluation, Economic policy, Macroeconomics

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