Marktwerking en de invloed van de bezettingsgraad op prijzen

Weak competitive forces may slow down price adjustment. According to one view, this would manifest itself in a weak level effect and a strong rate-of-change effect of capacity utilization in equations for relative price changes. This paper presents a theoretical analysis contesting this view. A strong rate-of-change effect is compatible with quick adjustment of prices to changes in short-run marginal cost. Moreover, sensitivity analysis with a small-scale model shows that a strong level effect does not promote fast return to long-run equilibrium. As, by its very nature, capacity utilization is a stationary variable, the long-run equilibrium itself is independent of the strengths of the level effect and the rate-of-change effect.