The Behaviour of Producer Prices: some Evidence from the French PPI Micro Data

Erwan Gautier

Working papers from Banque de France

Abstract: This paper provides some new empirical features on price setting behaviour for French producers using micro data underlying the producer and business-services price indices over the period 1994-2005. Some crucial methodological issues on the collection of producer prices are raised. Then, the main features of producers' price setting are presented: producer prices are modified quite frequently and by small amounts. A high heterogeneity across sectors is also observed: business-services prices change less often than industrial producer prices. The data lend some support to predictions of both time- and state-dependence models: Taylor contracts are not unusual but prices also respond to the changes in the firm's economic conditions. Nevertheless, time-dependent models are shown to be the most relevant theories to explain the producer price rigidity.

Keywords: Price stickiness; Price duration; Producer price index; Frequency of price change. (search for similar items in EconPapers)
JEL-codes: D43 E31 L11 L16 (search for similar items in EconPapers)
Pages: 45 pages
Date: 2006
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Citations: View citations in EconPapers (20)

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Working Paper: The behaviour of producer prices: some evidence from the French PPI micro data (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:bfr:banfra:160

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