Economics at your fingertips  

Measuring price selection in microdata: it’s not there

Peter Karadi, Raphael Schoenle and Jesse Wursten

No 2566, Working Paper Series from European Central Bank

Abstract: We use microdata to estimate the strength of price selection { a key metric for the effect of monetary policy on the real economy. We propose a product-level proxy for mispricing and assess whether products with larger mispricing respond with a higher probability to identified monetary and credit shocks. We find that they do not, suggesting selection is absent. Instead, we detect state-dependent adjustment on the gross extensive margin. Our results are broadly consistent with second-generation state-dependent pricing models and sizable effects of monetary policy on the real economy. JEL Classification: E31, E32, E52

Keywords: identified credit and monetary policy shocks; monetary non-neutrality; PPI microdata; price-gap proxy; scanner data; state-dependent pricing (search for similar items in EconPapers)
Date: 2021-06
New Economics Papers: this item is included in nep-cba, nep-mac and nep-mon
Note: 1871516
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed

Downloads: (external link) (application/pdf)

Related works:
Working Paper: Measuring Price Selection in Microdata - It's Not There (2020) Downloads
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:

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 ().

Page updated 2023-10-16
Handle: RePEc:ecb:ecbwps:20212566