EconPapers    
Economics at your fingertips  
 

Price elasticities and demand-side real rigidities in micro data and in macro models

Guenter Beck () and Sarah Lein ()

Journal of Monetary Economics, 2020, vol. 115, issue C, 200-212

Abstract: High degrees of demand-side real rigidities are able to generate the large monetary non-neutrality found in aggregate data. This paper provides micro-based evidence on the key parameters governing this rigidity using European homescan data. We find strong evidence for demand-side real rigidity, which is, however, significantly lower than that normally assumed in macro models. In a menu-cost model calibrated to our estimates, we show that these estimates are associated with reasonable values for production-side parameters, but they are not able to generate the degree of monetary non-neutrality observed in macro data.

Keywords: Demand curve; Price elasticity; Super-elasticity; Real rigidities; Monetary non-neutrality (search for similar items in EconPapers)
JEL-codes: C3 D12 E30 E31 E50 (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) Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0304393219301138
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Price elasticities and demand-side real rigidities in micro data and in macro models (2020) Downloads
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:200-212

DOI: 10.1016/j.jmoneco.2019.06.003

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 ().

 
Page updated 2021-10-16
Handle: RePEc:eee:moneco:v:115:y:2020:i:c:p:200-212