Identifying Price Reviews by Firms: An Econometric Approach

Mark Harris, Hervé Le Bihan and Patrick Sevestre ()
Additional contact information
Patrick Sevestre: AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique, Curtin Univ, Sch Econ Finance & Property

Post-Print from HAL

Abstract: Price reviews are a potentially costly activity. A significant fraction of unchanged prices may stem from firms not reviewing prices, rather than from obstacles to changing prices per se, such as menu costs. In this paper, we disentangle these two causes of price stickiness by estimating an inflated ordered probit model on a panel of French manufacturing firms. The results point to a low frequency of price reviews, suggestive of the relevance of information costs as a determinant of the observed price stickiness. In view of the "inattentive producers" literature, pointing that the source of price rigidity matters, this is suggestive of a large real effect of monetary policy.

Keywords: price stickiness; price reviews; price changes; inflated ordered probit model (search for similar items in EconPapers)
Date: 2020-03
New Economics Papers: this item is included in nep-eur, nep-mac and nep-mon
Note: View the original document on HAL open archive server: https://amu.hal.science/hal-02417497
References: Add references at CitEc
Citations: View citations in EconPapers (6)

Published in Journal of Money, Credit and Banking, 2020, 52 (2-3), pp.293-322. ⟨10.1111/jmcb.12675⟩

Downloads: (external link)
https://amu.hal.science/hal-02417497/document (application/pdf)

Related works:
Journal Article: Identifying Price Reviews by Firms: An Econometric Approach (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-02417497

DOI: 10.1111/jmcb.12675

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().