Price setting in the euro area: some stylised facts from individual producer price data

Philip Vermeulen, Daniel Dias, Maarten Dossche, Erwan Gautier, Ignacio Hernando (), Roberto Sabbatini () and Harald Stahl ()
Additional contact information
Ignacio Hernando: Banco de España
Roberto Sabbatini: Banca d’Italia
Harald Stahl: Deutsche Bundesbank

No 703, Working Papers from Banco de España

Abstract: This paper documents producer price setting in 6 countries of the euro area: Germany, France, Italy, Spain, Belgium and Portugal. It collects evidence from available studies on each of those countries and also provides new evidence. These studies use monthly producer price data. The following five stylised facts emerge consistently across countries. First, producer prices change infrequently: each month around 21% of prices change. Second, there is substantial cross-sector heterogeneity in the frequency of price changes: prices change very often in the energy sector, less often in food and intermediate goods and least often in non-durable non- food and durable goods. Third, countries have a similar ranking of industries in terms of frequency of price changes. Fourth, there is no evidence of downward nominal rigidity: price changes are for about 45% decreases and 55% increases. Fifth, price changes are sizeable compared to the inflation rate. The paper also examines the factors driving producer price changes. It finds that costs structure, competition, seasonality, inflation and attractive pricing all play a role in driving producer price changes. In addition producer prices tend to be more flexible than consumer prices.

Keywords: price-setting; producer prices (search for similar items in EconPapers)
JEL-codes: C25 D40 E31 (search for similar items in EconPapers)
Pages: 52 pages
Date: 2007-02
New Economics Papers: this item is included in nep-cba, nep-eec, nep-mac, nep-mic, nep-mkt and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (93)

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http://www.bde.es/f/webbde/SES/Secciones/Publicaci ... o/07/Fic/dt0703e.pdf First version, February 2007 (application/pdf)

Related works:
Journal Article: Price Setting in the Euro Area: Some Stylized Facts from Individual Producer Price Data (2012)
Journal Article: Price Setting in the Euro Area: Some Stylized Facts from Individual Producer Price Data (2012)
Working Paper: Price setting in the euro area: some stylised facts from individual producer price data (2007)
Working Paper: Price setting in the euro area: some stylised facts from individual producer price data (2007)
Working Paper: Price setting in the euro area: Some stylised facts from Individual Producer Price Data (2007)
Working Paper: Price setting in the euro area: some stylised facts from individual producer price data (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:bde:wpaper:0703

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