Sticky Prices in the Euro Area: A Summary of New Micro Evidence

Luis J. Alvarez, E. Dhyne, M. Hoeberichts, C. Kwapil, Hervé LE BIHAN (), P. Lünnemann, Fernando Manuel Monteiro Martins (), R. Sabbatini, Harald Edgar Stahl (), P. Vermeulen and J. Vilmunen

Documents de Travail from Banque de France

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
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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 (2006)
Working Paper: Sticky prices in the euro area: a summary of new micro evidence (2005)
Journal Article: Sticky Prices in the Euro Area: A Summary of New Micro-Evidence (2006)
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