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Menu Costs in New Keynesian Models
This paper is on the devlopment of New Keynesian models concerning the meaning of menu costs, the importance of menu costs, and epirical support for the concept, with menu costs referring to changing prices, showing that prices do not adjust immediately to clear markets because adjusting prices is costly, for in order to change prices, a firm may need to send out a new catalog to customers, distribute new price lists to its sales staff, or, in the case of a restaurant, print new menus.
