Sticky prices in the euro area: a summary of new micro evidence

Luis J. Alvarez, Emmanuel Dhyne (), Marco Hoeberichts (), Claudia Kwapil (), Hervé LE BIHAN (), Patrick Lünnemann (), Fernando Manuel Monteiro Martins (), Roberto Sabbatini (), Harald Edgar Stahl (), Philip Vermeulen () and Jouko Vilmunen ()
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Emmanuel Dhyne: Banque Nationale de Belgique
Claudia Kwapil: Oesterreichische Nationalbank
Patrick Lünnemann: Banque Centrale du Luxembourg
Roberto Sabbatini: Banca d’Italia
Jouko Vilmunen: Bank of Finland

No 542, Banco de España Working Papers from Banco de España

Abstract: This paper presents original evidence on price setting in the euro area at the individual level. We use micro data on consumer (CPI) and producer (PPI) prices, as well as survey information. Our main findings are: (i) prices in the euro area are sticky and more so than in the US; (ii) there is evidence of heterogeneity and of asymmetries in price setting behaviour; (iii) downward price rigidity is only slightly more marked than upward price rigidity and (iv) implicit or explicit contracts and coordination failure theories are important, whereas menu or information costs are judged much less relevant by firms.

Keywords: price setting; price stickiness; consumer prices; producer prices; survey data (search for similar items in EconPapers)
JEL-codes: C25 D40 E31 (search for similar items in EconPapers)
Date: 2005-12
Note: Also published as ECB Working Paper Nº 563.
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http://www.bde.es/webbde/SES/Secciones/Publicacion ... o/05/Fic/dt0542e.pdf First version, December 2005 (application/pdf)

Related works:
Working Paper: Sticky Prices in the Euro Area: a Summary of New Micro Evidence (2005)
Working Paper: Sticky Prices in the Euro Area: A Summary of New Micro Evidence (2005)
Working Paper: Sticky prices in the euro area - a summary of new micro evidence (2005)
Working Paper: Sticky prices in the euro area: a summary of new micro evidence (2006)
Journal Article: Sticky Prices in the Euro Area: A Summary of New Micro-Evidence (2006)
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Persistent link: http://EconPapers.repec.org/RePEc:bde:wpaper:0542

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