Firms' Recent Price-Setting Behavior for Services Prices in the Consumer Prices

Tatsuya Ozaki, Tomoyuki Yagi and Akihito Yoshii
Additional contact information
Tatsuya Ozaki: Bank of Japan
Tomoyuki Yagi: Bank of Japan
Akihito Yoshii: Bank of Japan

No 24-E-10, Bank of Japan Review Series from Bank of Japan

Abstract: In the consumer prices for services, labor costs account for a high share of output prices. With the strengthening linkage between wages and prices, services prices are an important factor for increases in underlying CPI inflation. Services prices in Japan remained at around 0 percent on a year-on-year basis and extremely sticky. Through an analysis of firms' recent behavior, it is clear that their price-setting behavior has begun to change, as shown by a rapid increase in the rate of wage increases in the annual spring labor-management wage negotiations for two consecutive years and the "beginning-of-the-period price hikes" seen in many services items in spring 2024. Going forward, it is important to continue to examine from a broad perspective whether these changes in firms' price-setting behavior will spread further and whether underlying inflation will rise steadily.

Keywords: Consumer prices; Wage; Pass-Through; Cost structure; Lasso; Probit; Time-varying parameter VAR (search for similar items in EconPapers)
JEL-codes: C23 C32 E30 E31 (search for similar items in EconPapers)
Date: 2024-11-13
New Economics Papers: this item is included in nep-mon
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.boj.or.jp/en/research/wps_rev/rev_2024/data/rev24e10.pdf (application/pdf)

Related works:
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:boj:bojrev:rev24e10

Access Statistics for this paper

More papers in Bank of Japan Review Series from Bank of Japan Contact information at EDIRC.
Bibliographic data for series maintained by Bank of Japan ().