Changing prices... changing times: evidence for Italy

Silvia Fabiani () and Mario Porqueddu ()
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Mario Porqueddu: Bank of Italy

No 275, Questioni di Economia e Finanza (Occasional Papers) from Bank of Italy, Economic Research and International Relations Area

Abstract: This paper examines the process of adjustment of prices in Italy to determine whether nominal flexibility, measured by the frequency of price changes, has increased in the recent years of protracted stagnation and double-dip recession. The analysis is based on a large micro-level dataset of individual prices collected monthly by Istat from 2006 to 2013 for the Consumer Price Index. We find that both the percentage of prices adjusted monthly and the average size of the adjustment have risen significantly since the 1996-2001 period, in particular for downward changes. This greater flexibility is related in part to the spread of modern distribution structures. Our estimates further indicate that the recession has affected the price adjustment mechanism: for manufactures, price cuts have become larger and more frequent, while increases are more moderate; for services, both the frequency and the size of price increases have diminished.

Keywords: consumer prices; nominal flexibility; frequency of price adjustmen. (search for similar items in EconPapers)
JEL-codes: D21 D40 E31 L11 (search for similar items in EconPapers)
Date: 2015-06
New Economics Papers: this item is included in nep-com, nep-eec and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Working Paper: Changing prices... changing times: evidence for Italy (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:bdi:opques:qef_275_15

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