How frequently do prices change? Evidence based on the micro data underlying the Belgian CPI

Luc Aucremanne and Emmanuel Dhyne

No 331, Working Paper Series from European Central Bank

Abstract: This paper examines the degree of price rigidity in Belgian consumer prices, using a large database. As to the observed degree of rigidity, the results reveal a substantial amount of heterogeneity, not only across but also within product categories. While prices turn out to be perfectly flexible for some product categories, they tend to be very sticky for others. Each month, nearly 17 p.c. of the consumer prices change on average and the median duration of a price spell is close to 13 months. A substantial subset of our results is compatible with state-dependent pricing, while other results suggest that some timedependency exists as well. The majority of price changes are price increases, but price decreases are not uncommon, except for services. The size of price changes is important. Price changes do not seem to be highly synchronised across price-setters within relatively homogenous product categories. JEL Classification: D21, D40, E31

Keywords: consumer prices; price rigidity; staggered pricing; state-dependent pricing; time-dependent pricing (search for similar items in EconPapers)
Date: 2004-04
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (149)

Downloads: (external link)
https://www.ecb.europa.eu//pub/pdf/scpwps/ecbwp331.pdf (application/pdf)

Related works:
Working Paper: How frequently do prices change? Evidence based on the micro data underlying the Belgian CPI (2004)
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:ecb:ecbwps:2004331

Access Statistics for this paper

More papers in Working Paper Series from European Central Bank 60640 Frankfurt am Main, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Official Publications ().