Some evidence on factor intensity and price rigidity

Ekaterina Peneva

Journal of Economic Dynamics and Control, 2011, vol. 35, issue 10, 1652-1658

Abstract: This paper establishes a new empirical finding: the degree of labor intensity and the degree of price flexibility are negatively correlated across industrial sectors in the U.S. economy. This finding suggests that varying factor intensity can potentially generate different degrees of price stickiness across sectors and remove the need to exogenously impose the latter. Of course, labor intensity is just one more feature--in addition to others like the durability of goods produced and the degree of competition--that can explain some of the heterogeneity in price durations across sectors.

Keywords: Price; rigidity; Factor; intensity (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:dyncon:v:35:y:2011:i:10:p:1652-1658

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