An empirical study on price rigidity

Arbeitspapier

This paper uses unpublished retailer-level microdata underlying UK consumer price indices to investigate price rigidity. Based on the conventional method, little rigidity is found in frequency of price change, since the implied price duration is only 5.5 months. However, it significantly underestimates the true duration (9.3 months) as suggested by cross-sectional method. Results also exhibit conspicuous heterogeneities in rigidity across sectors and shop types but weak difference across regions and time. The overall distribution of duration can be decomposed by sector into a decreasing component and a cyclical component with 4-month cycles. Both time and state dependent features exist in pricing. These findings support New Keynesian theories and enable a better calibration to improve the performances of macroeconomic models.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: Cardiff Economics Working Papers ; No. E2010/11

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Duration Analysis; Optimal Timing Strategies ; Firm Behavior: Empirical Analysis ; Price Level; Inflation; Deflation ; Production, Pricing, and Market Structure; Size Distribution of Firms
• Thema: Price Rigidity ; Price Duration ; Microdata ; Cross-Sectional

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Dixon, Huw ; Zhou, Peng
• Ereignis: Veröffentlichung
• (wer): Cardiff University, Cardiff Business School
• (wo): Cardiff
• (wann): 2010

Weitere Informationen

• Handle: http://hdl.handle.net/10419/65802
• Letzte Aktualisierung: 10.03.2025, 11:43 MEZ