We develop a tractable model of price dynamics in a general equilibrium economy with cash-in-advance constraints. The dynamics emerge from local interactions between firms that are governed by the production network underlying the economy. We analytically characterise the influence of network structure on the propagation of monetary shocks. In the long run, the model converges to general equilibrium and the quantity theory of money holds. In the short run, monetary shocks propagate upstream via nominal changes in demand and downstream via real changes in supply. Lags in the evolution of supply and demand at the micro level can give rise to arbitrary dynamics of the distribution of prices. Our model provides an explanation of the price puzzle: a temporary rise in the price level in response to monetary contractions. In our setting, the puzzle emerges under two assumptions about downstream firms: they are disproportionally affected by monetary contractions and they account for a sufficiently small share of the wage bill. Empirical evidence supports the two assumptions for the US economy. Our model calibrated to the US economy using a data set of more than fifty thousand firms generates the empirically observed magnitude of the price level rise after monetary contractions.

我们开发了一个具有现金预付约束的一般均衡经济中价格动态的易处理模型。动态是由受经济基础的生产网络支配的企业之间的本地互动产生的。我们分析地描述了网络结构对货币冲击传播的影响。从长远来看，该模型将收敛于一般均衡，并且货币数量理论成立。在短期内，货币冲击会通过需求的名义变化向上游传播，并通过实际的供应变化向下游传播。微观水平上供求关系的滞后会引起价格分布的任意动态。我们的模型解释了价格难题：由于货币紧缩，价格水平暂时上升。在我们的环境中 这个难题是在关于下游企业的两个假设下出现的：它们受到货币紧缩的不成比例的影响，并且它们在工资支出中所占的份额很小。经验证据支持美国经济的两个假设。我们使用超过五万家公司的数据集对美国经济进行了校准的模型产生了经验观察到的货币收缩后价格水平上涨的幅度。