EconPapers    
Economics at your fingertips  
 

Price Adjustments in a General Model of State‐Dependent Pricing

James Costain and Anton Nakov

Journal of Money, Credit and Banking, 2011, vol. 43, issue 2‐3, 385-406

Abstract: We study the distribution of retail price adjustments under the assumption that firms are more likely to adjust their prices when doing so is more valuable. Our setup nests Calvo (1983) at one extreme and a fixed menu cost model at the other; all parameterizations are ranked by a measure of state dependence. High state dependence implies, counterfactually, that there are no small price changes and that the variance of price changes falls sharply with trend inflation. The parameterization that best fits microdata has low state dependence, implying a Phillips curve coefficient 60% as large as that of the Calvo model, but is nonetheless well behaved at high inflation rates.

Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

Downloads: (external link)
https://doi.org/10.1111/j.1538-4616.2010.00378.x

Related works:
Journal Article: Price Adjustments in a General Model of State-Dependent Pricing (2011)
Working Paper: Price adjustments in a general model of state-dependent pricing (2008) 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:wly:jmoncb:v:43:y:2011:i:2-3:p:385-406

Access Statistics for this article

Journal of Money, Credit and Banking is currently edited by Robert deYoung, Paul Evans, Pok-Sang Lam and Kenneth D. West

More articles in Journal of Money, Credit and Banking from Blackwell Publishing
Bibliographic data for series maintained by Wiley Content Delivery ().

 
Page updated 2025-03-22
Handle: RePEc:wly:jmoncb:v:43:y:2011:i:2-3:p:385-406