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 ()

No 2006,02, Discussion Paper Series 1: Economic Studies from Deutsche Bundesbank, Research Centre

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: E31 D40 C25 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba, nep-eec, nep-mac and nep-mic
Date: 2006
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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 (2005)
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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Persistent link: http://EconPapers.repec.org/RePEc:zbw:bubdp1:4239

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