Price points and price dynamics

Volker Hahn and Michal Marenčák

Journal of Monetary Economics, 2020, vol. 115, issue C, 127-144

Abstract: A standard model of price-setting is extended to include an important role for price points as well as sticky information. It makes empirically reasonable predictions about the frequency of price adjustments, the sizes of price increases and decreases, the shape of the hazard function, the fraction of price changes that are price increases, and the relationship between price changes and inflation. When the model of price-setting is integrated into a small-scale DSGE model, it implies plausible aggregate effects of monetary policy in contrast to a model with a prominent role for price points but no information rigidities.

Keywords: Price dynamics; Price stickiness; Price point; Sticky information (search for similar items in EconPapers)
JEL-codes: E31 E37 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0304393218301156
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Price Points and Price Dynamics (2018)
Working Paper: Price Points and Price Dynamics (2018)
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:eee:moneco:v:115:y:2020:i:c:p:127-144

DOI: 10.1016/j.jmoneco.2019.05.007

Access Statistics for this article

Journal of Monetary Economics is currently edited by R. G. King and C. I. Plosser

More articles in Journal of Monetary Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().