The frequency and size of price adjustment: microeconomic evidence

Attila Rátfai
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Attila Rátfai: Central European University, Budapest, Hungary, Postal: Central European University, Budapest, Hungary

Managerial and Decision Economics, 2007, vol. 28, issue 7, pages 751-762

Abstract: This paper presents direct, non-parametric microeconomic evidence on pricing behavior and evaluates the findings in light of theories of nominal price rigidity. The main issues examined include the durability of price quotations and the size of price changes. The analysis is based on a unique high-frequency panel data set of consumer prices recorded in 1993-1996 in Hungary. The results indicate that price adjustment patterns in the sample are primarily consistent with implications of two-sided (S,s) pricing models. Copyright © 2007 John Wiley & Sons, Ltd.

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