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# Three Essays in Economics

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Type of Publication: | Dissertation |

Publication status: | Published |

URI (citable link): | http://nbn-resolving.de/urn:nbn:de:bsz:352-2-naqowh1jzyo26 |

Author: | Marenčák, Michal |

Year of publication: | 2019 |

Summary: |
This dissertation consists of three self-contained research papers and has been written during my studies in the Doctoral Programme in Quantitative Economics and Finance at the University of Konstanz. The first paper (Chapter 2) is a joint work with Volker Hahn. We examine the impact of prices with special endings, also referred to as price points, on patterns of microeconomic price adjustment. It includes a comprehensive appendix which lays the foundation for a revised version of the paper. The second paper (Chapter 3) is a single-authored work and studies the interaction between positive trend inflation and real rigidities. The third paper (Chapter 4) is a joint work with Carl Maier in which we focus on information acquisition on posted offer markets.
The research question examined in Chapter 2 is to what extent, if at all, prices with special endings such as $0.99 or $5.00, also referred to as price points, can explain the observed price dynamics at the micro level if one abstracts from conventional sources of price stickiness such as menu costs. We present a macroeconomic model with positive trend inflation in which nominal rigidities result from price points and sticky information. We argue that a model variant that allows for a general distribution of price points is consistent with many stylized facts of price setting found in the micro data. More specifically, it makes empirically reasonable predictions concerning the duration of price spells, the shape of the hazard function, the fraction and the size of price decreases and, in particular, the relationship between price changes and inflation. Our model captures several facts which the Calvo sticky-price model cannot explain and generates plausible aggregate effects of monetary policy. Real rigidities, i.e. mechanisms dampening the magnitude of price changes conditional on price adjustment, are typically seen as key in explaining the long-lasting effects of monetary policy. In Chapter 3 we show that different sources of real rigidities which are equivalent under zero trend inflation lead to markedly different implications for dynamics of inflation, employment and the effectiveness of monetary policy when inflation follows a positive trend. Our contribution is twofold. First, we use theory and data to infer the degrees of real rigidities by assessing their empirical performance in matching the US inflation dynamics in the context of a New Keynesian model with Calvo pricing. Second, we document a potentially negative impact of trend inflation on the key ability of real rigidities in amplifying the real effects of monetary policy. Although we infer strong degrees of real rigidities from the data, the real effects of monetary disturbances are comparable to a model without real rigidities. In Chapter 4 we examine the phenomenon of a large number of unsuitable applications on posted offer markets observed in the data. To this end, we propose a microeconomic model in which sellers are capacity constrained and buyers do not know ex ante whether a given offer suits them or not. Buyers endogenously decide to acquire information or to apply despite being uninformed. Our model has clear welfare implications in favor of informed signaling and shows that falling transaction costs can decrease market efficiency. We argue that the generally held view that online markets are more efficient than traditional markets may be misleading. |

Examination date (for dissertations): | Feb 15, 2019 |

Dissertation note: | Doctoral dissertation, University of Konstanz |

Subject (DDC): | 330 Economics |

Keywords: | Monetary Economics, Macroeconomics, Price Points, Nominal Rigidities, Real Rigidities, Trend Inflation, Posted Offer Markets |

Link to License: | In Copyright |

Checksum:
MD5:0965e31a66509b89a73be554db9a6bbf

MARENČÁK, Michal, 2019. Three Essays in Economics [Dissertation]. Konstanz: University of Konstanz

@phdthesis{Marencak2019Three-45224, title={Three Essays in Economics}, year={2019}, author={Marenčák, Michal}, address={Konstanz}, school={Universität Konstanz} }

Marencak_2-naqowh1jzyo26.pdf | 750 |