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Inflation Dynamics During the Financial Crisis
December 23, 2016 | Leave a Comment
Liquidity constrained firms increased prices in 2008, while their unconstrained counterparts cut prices, a study by Simon Gilchrist, Raphael Schoenle, Jae Sim, and Egon Zakrajšek shows. This reflects decisions by the constrained firms to preserve internal liquidity and avoid accessing external finance, factors that strengthen the countercyclical behavior of markups.
To read more, see Inflation Dynamics During the Financial Crisis .