From Marginal Cost Pricing to Balance-Sheet Pricing: Empirical Evidence from a Credit Economy

If prices move with credit stocks and credit acceleration while wages lag, then marginal-cost pricing with exogenous money is impossible; prices must clear balance sheets under endogenous credit.

The empirical failures addressed in this paper are therefore not isolated findings but are independently documented across monetary institutions, inflation studies, and macro-finance. Balance-sheet pricing provides a unified explanation consistent with this evidence, while marginal-cost pricing does not.