Read full paper at: http://www.scirp.org/journal/PaperInformation.aspx?PaperID=50727#.VEmy9VfHRK0 Author(s) Pablo L. Schiaffino 1 , Juan Pablo Pinasco 2 Affiliation(s) 1 Facultad de Ciencias Económicas, Universidad de Palermo, Buenos Aires, Argentina . 2 Facultad de Ciencias Exactas, Universidad de Buenos Aires, Buenos Aires, Argentina . ABSTRACT In this paper we present a macroeconomic foundation of downward money price inflexibility based on classical Monetary Economics. We show that under the principle of risk aversion and the neutral money axiom, our model derives an endogenous asymmetric price response as prices adjust more rapidly when they go upward than downward. This asymmetry does not disappear; o...
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