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On the Timing of Production Decisions in Monetary Economies

Anbarci, Nejat; Dutu, Richard; Sun, Ching-Jen (2019), On the Timing of Production Decisions in Monetary Economies, International Economic Review, 60, 1, p. 447-472. 10.1111/iere.12359

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MPRA_paper_72876.pdf (459.1Kb)
Type
Article accepté pour publication ou publié
Date
2019
Journal name
International Economic Review
Volume
60
Number
1
Publisher
Wiley
Pages
447-472
Publication identifier
10.1111/iere.12359
Metadata
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Author(s)
Anbarci, Nejat
Faculty of Business and Law, Deakin University
Dutu, Richard
Laboratoire d'Economie de Dauphine [LEDa]
Sun, Ching-Jen
Faculty of Business and Law, Deakin University
Abstract (EN)
In most macroeconomic models inflation tends to be harmful. In this article, we show that by simply changing the timing of production decisions by firms from “on demand” to “in advance,” some inflation can boost welfare as long as goods are sufficiently perishable. The main conclusion from this research is that by effectively hiding the strategic interaction between supply and demand, assuming production on demand is not without loss of generality.
Subjects / Keywords
Timing; Perishability; Production; Money; Inflation; Search
JEL
E40 - General
D20 - General
C70 - General

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