Price Stickiness and Sectoral Inflation Persistence: Additional Evidence

Hervé Le Bihan and Julien Matheron

Working papers from Banque de France

Abstract: In this paper, using US as well as French sectoral data and indicators of price rigidity, we re-examine the (lack of) relation between price stickiness and inflation persistence. This has recently been put forward by Bils and Klenow (2004) as evidence against time-dependent price setting models. We obtain that, when filtering out sector-specific shocks along the lines of Boivin et al. (2009), and allowing for an alternative assumption on the marginal cost process, the case against the time-dependent Calvo model is substantially weakened.

Keywords: Sticky prices; Heterogeneity; Inflation persistence. (search for similar items in EconPapers)
JEL-codes: E31 E32 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2011
New Economics Papers: this item is included in nep-cba and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Price Stickiness and Sectoral Inflation Persistence: Additional Evidence (2012)
Journal Article: Price Stickiness and Sectoral Inflation Persistence: Additional Evidence (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:bfr:banfra:353

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