Criticism
Others such as George Stigler have argued against kinked demand. His primary opposition is summarized in a Working Paper out of the Stanford University Economics Department by seminal authors Elmore, Kautz, Walls et al.
New classical economists, led by Chicago’s George Stigler, worked to discredit the kinked demand models. Stigler first argues that the kinked demand models are not useful, as Hall and Hitch’s model only explains observed phenomenon and is not predictive. He further explains that the kinked demand analysis only suggests why prices remain sticky and does not describe the mechanism that establishes the kink and how the kink can reform once prices change. Stigler also asserts that the model is unnecessary because Chicago theory already included allowances for short-run sticky prices due to collusion, menu costs, and regulatory or bureaucratic inefficiencies in markets.
Read more about this topic: Kinked Demand
Famous quotes containing the word criticism:
“I consider criticism merely a preliminary excitement, a statement of things a writer has to clear up in his own head sometime or other, probably antecedent to writing; of no value unless it come to fruit in the created work later.”
—Ezra Pound (1885–1972)
“Of all the cants which are canted in this canting world—though the cant of hypocrites may be the worst—the cant of criticism is the most tormenting!”
—Laurence Sterne (1713–1768)
“Nothing would improve newspaper criticism so much as the knowledge that it was to be read by men too hardy to acquiesce in the authoritative statement of the reviewer.”
—Richard Holt Hutton (1826–1897)