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The patterns and determinants of price setting in the Belgian industry

Maarten Dossche and David Cornille

No 618, Working Paper Series from European Central Bank

Abstract: This paper documents the patterns and determinants of price setting in the Belgian industry. We analyse the micro data underlying the Producer Price Index (PPI) over the period from February 2001 to January 2005. On average only one out of four prices changes in a typical month, whereas the absolute size of a price change amounts to 6%. The frequencies of price adjustment are particularly heterogeneous across sectors, which is determined by heterogeneity in the market and cost structure. We find no signs of downward nominal rigidity. A joint analysis of sizes and frequencies of price adjustment across time shows that price setting is characterised by both time- and state-dependent pricing. About 38% of the exported goods are a JEL Classification: D40, E31

Keywords: nominal price rigidity; pricing-to-market; producer price setting; staggering; state-dependent pricing; time-dependent pricing (search for similar items in EconPapers)
Date: 2006-05
Note: 3577821
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17)

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Persistent link: https://EconPapers.repec.org/RePEc:ecb:ecbwps:2006618

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