Craigwell, Roland and Moore, Winston and Morris, Diego and Worrell, DeLisle (2011): Price Rigidity: A Survey of Evidence From Micro-Level Data. Published in: Price Formation and Inflation Dynamics in the Caribbean (2011)
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Over the last decade or more micro price studies have proliferated. In this paper a survey of this literature reveals alternative theoretical explanations of sticky prices: (a) sellers review and change prices only at predetermined intervals (except under extraordinary circumstances), so that any price reaction appears only when that time arrives (referred to as “time dependent pricing”); or (b) prices are always reviewed after a shock or policy move (“state dependent pricing”), but may be altered only if the difference between the actual and the new target price is sufficient to warrant an adjustment. The empirical evidence is that prices take longer to change in developed countries than in developing economies. In addition, the frequency of price movements differs widely across goods and the timing of price changes is not synchronized across sellers.
|Item Type:||MPRA Paper|
|Original Title:||Price Rigidity: A Survey of Evidence From Micro-Level Data|
|English Title:||PRICE RIGIDITY: A SURVEY OF EVIDENCE FROM MICRO-LEVEL DATA|
|Keywords:||Price Rigidity; Consumer Prices; Inflation, Survey data|
|Subjects:||D - Microeconomics > D4 - Market Structure and Pricing > D40 - General
L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance
E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles
C - Mathematical and Quantitative Methods > C4 - Econometric and Statistical Methods: Special Topics
|Depositing User:||Roland Craigwell|
|Date Deposited:||31. Aug 2012 15:50|
|Last Modified:||13. Feb 2013 07:20|
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