Heterogeneity in Price Rigidity: Evidence from a Case Study Using Microlevel Data

Daniel Levy (), Shantanu Dutta and Mark Bergen

Journal of Money, Credit and Banking, 2002, vol. 34, issue 1, 197-220

Abstract: We combine two datasets to study price rigidity. The first consists of weekly time series of retail, wholesale, and spot prices for twelve products. These time series contain two exogenous cost shocks. We find that prices exhibit more rigidity in response to the second shock than the first. The second dataset consists of all publicly available information about the shocks. Content analysis of these information reveals that the first shock is larger and more persistent, and the market has more information on it than the second. We conclude, therefore, that prices are more flexible in response to cost shocks that are larger, that are more persistent, and on which market participants have more information.

Date: 2002
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Related works:
Working Paper: Heterogeneity in Price Rigidity: Evidence from a Case Study Using Micro-Level Data (2004)
Journal Article: Heterogeneity in Price Rigidity: Evidence from a Case Study Using Microlevel Data (2002)
Working Paper: Heterogeneity in Price Rigidity: Evidence from a Case Study Using Micro-Level Data (2002)
Working Paper: Heterogeneity in Price Rigidity: Evidence from a Case Study Using Micro-Level Data (2002)
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Persistent link: https://EconPapers.repec.org/RePEc:mcb:jmoncb:v:34:y:2002:i:1:p:197-220

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