Wage and Price Setting. New Evidence from Uruguayan Firms

Fernando Borraz, Gerardo Licandro and Daniela Sola ()
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Daniela Sola: Universidad de Montevideo (Uruguay)

No 2013008, Documentos de trabajo from Banco Central del Uruguay

Abstract: This paper presents new evidence on wage and price setting based on a survey of more than 300 Uruguayan firms in 2013. Most of the firms set prices considering costs and adding a profit margin; therefore, they have some degree of market power. The evidence indicates that price increases appear quite flexible in Uruguay (prices are downward rigid). Most of the firms adjust their prices without following a regular frequency which suggests that price changes in Uruguay are state-dependent, although wage changes are concentrated in January and July. Interestingly, the cost of credit is seen by companies as an irrelevant factor in explaining price increases. We also find that cost reduction is the principal strategy to a negative demand shock. Finally, the adjustment of prices to changes in wages is relatively fast

Keywords: price setting; labor market; survey evidence; Uruguay (search for similar items in EconPapers)
JEL-codes: D40 E31 J30 L16 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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https://www.bcu.gub.uy/Estadisticas-e-Indicadores/ ... 20Trabajo/8.2013.pdf First version, 2013 (application/pdf)

Related works:
Journal Article: Wage and price setting: new evidence from Uruguayan firms (2020)
Working Paper: Wage and price setting: new evidence from Uruguayan firms (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:bku:doctra:2013008

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