Evidence from Surveys of Price-Setting Managers: Policy Lessons and Directions for Ongoing Research

Vitor Gaspar, Andrew Levin (), Frank Smets and Fernando Martins

No 6227, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Understanding the features and the determinants of individual price setting behaviour is important for the formulation of monetary policy. These behavioural mechanisms play a fundamental role in influencing the characteristics of aggregate inflation and in determining how monetary policy affects inflation and real economic activity. The Inflation Persistence Network, a collaborative research effort of the Eurosystem, analysed a large number of panel data sets of individual price records and conducted surveys of price-setting managers in many euro area countries. This paper discusses to what extent the extensive evidence coming from those two data sources provides support for some basic elements of the New Keynesian perspective. It analyses the implications of the micro evidence for distinguishing between competing theories of price stickiness and provides some brief reflections about the lessons for monetary policy.

Keywords: Monetary policy; New keynesian models; Price setting; Price stickiness (search for similar items in EconPapers)
JEL-codes: D4 E1 E3 (search for similar items in EconPapers)
Date: 2007-03
New Economics Papers: this item is included in nep-cba and nep-mac
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Citations: View citations in EconPapers (6)

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Working Paper: Evidence from surveys of price-setting managers: Policy lessons and directions for ongoing research (2009)
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