English, Article, Journal or magazine article edition: Lumpy price adjustments : a microeconometric analysis Emmanuel Dhyne; Catherine Fuss; M. Hashem Pesaran; ...

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Bookmark: http://trove.nla.gov.au/version/17820
Physical Description
  • preprint
Language
  • English

Edition details

Title
  • Lumpy Price Adjustments: A Microeconometric Analysis
Author
  • Emmanuel Dhyne
  • Catherine Fuss
  • M. Hashem Pesaran
  • Patrick Sevestre
Physical Description
  • preprint
Notes
  • RePEc:ces:ceswps:_2010
  • This paper presents a simple model of state-dependent pricing that allows identifying the relative importance of both nominal and real factors in price rigidity. Using two rich datasets consisting of a large fraction of the price quotes used to compute the Belgian and French Consumer Price Indices, we are able to evaluate, the importance of the menu costs and to discriminate between idiosyncratic and common shocks that affect the marginal cost and/​or the desired mark-up at the outlet level. We find that infrequent price changes are not necessarily associated with large menu costs. Indeed, real rigidities appear to play a significant role. We also find that asymmetry in the price adjustment may result from a trend in marginal costs and/​or desired mark-ups rather than from asymmetric menu costs
  • Sticky prices, menu costs, nominal and real rigidities, micro panels
  • RePEc:nbb:reswpp:200610-12
  • This paper presents a simple model of state-dependent pricing that allows identification of the relative importance of the degree of price rigidity that is inherent to the price setting mechanism (intrinsic) and that which is due to the price’s driving variables (extrinsic). Using two data sets consisting of a large fraction of the price quotes used to compute the Belgian and French CPI, we are able to assess the role of intrinsic and extrinsic price stickiness in explaining the occurrence and magnitude of price changes at the outlet level. We find that infrequent price changes are not necessarily associated with large adjustment costs. Indeed, extrinsic rigidity appears to be significant in many cases. We also find that asymmetry in the price adjustment could be due to trends in marginal costs and/​or desired mark-ups rather than asymmetric cost of adjustment bands.
  • sticky prices, nominal intrinsic and extrinsic rigidities, micro non-linear panels
  • RePEc:iza:izadps:dp2793
Language
  • English
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