Is there any asymmetry in the effect of inflation on relative price variability?

Chi-Young Choi and Young Se Kim

Economics Letters, 2010, vol. 108, issue 2, 233-236

Abstract: It is widely perceived that relative prices are more dispersed in periods of price decreases than in periods of price increases. We show that the asymmetry results from misspecifying the true, U-shaped, underlying model with a piecewise linear regression model.

Keywords: Asymmetry; Inflation; Relative; price; variability; (RPV); U-shape (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (16)

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