 Microeconomic Evidence on Price-SettingPete Klenow and Benjamin Malin Chapter 06 in Handbook of Monetary Economics, 2010, vol. 3, pp 231-284 from Elsevier Abstract: The last decade has seen a burst of micro price studies. Many studies analyze data underlying national CPIs and PPIs. Others focus on more granular subnational grocery store data. We review these studies with an eye toward the role of price setting in business cycles. We summarize with ten stylized facts: prices change at least once a year, with temporary price discounts and product turnover often playing an important role. After excluding many short-lived prices, prices change closer to once a year. The frequency of price changes differs widely across goods, however, with more cyclical goods exhibiting greater price flexibility. The timing of price changes is little synchronized across sellers. The hazard (and size) of price changes does not increase with the age of the price. The cross-sectional distribution of price changes is thick-tailed, but contains many small price changes too. Finally, strong linkages exist between price changes and wage changes. Keywords: Micro Price Data; Nominal Stickiness; Time-Dependent Pricing; State-Dependent Pricing; Contract Multiplier (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:monchp:3-06 Access Statistics for this chapter More chapters in Handbook of Monetary Economics from Elsevier |
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