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Price-Setting Behavior in Brazil: Survey Evidence

Arnildo Correa, Myrian Petrassi and Rafael Santos ()
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Arnildo Correa: Banco Central do Brasil
Myrian Petrassi: Banco Central do Brasil
Rafael Santos: Banco Central do Brasil and EPGE/FGV

Journal of Business Cycle Research, 2018, vol. 14, issue 2, No 4, 283-310

Abstract: Abstract Price surveys became popular after the seminal work of Blinder (Am Econ Rev 81(2):89–100, 1991) exploring US firms’ price-setting practices, which filled some blanks left by the simple observation of prices charged by firms. The present paper reports the findings from a survey conducted by the Central Bank of Brazil with local firms and discusses some policy implications. The sample consisted of 7002 firms and three economic sectors: manufacturing, services and commerce. Data suggest important features about price-setting behavior in Brazil: the cost of reviewing prices is low, but there is significant nominal rigidity—firms report to change prices approximately 3.6 times per year; state-dependent rules seem to be more frequent than time-dependent behavior; markup pricing appears to be the dominant strategy; and the two most important factors driving price changes in Brazil are the cost of intermediate goods and the inflation rate .

Keywords: Survey data; Price setting; Nominal rigidity; Micro price data (search for similar items in EconPapers)
JEL-codes: E30 E50 D40 (search for similar items in EconPapers)
Date: 2018
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DOI: 10.1007/s41549-018-0029-x

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