Stuck at Zero: Price Rigidity in a Runaway Inflation*

Avichai Snir (), Haipeng (Allan) Chen () and Daniel Levy ()
Additional contact information
Avichai Snir: Netanya Academic College

Post-Print from HAL

Abstract: We use micro level retail price data from convenience stores to study the link between 0-ending price points and price rigidity during a period of a runaway inflation, when the annual inflation rate was in the range of 60%-430%. Surprisingly, we find that 0-ending prices are less likely to adjust, and when they do adjust, the average adjustments are larger. These findings suggest that price adjustment barriers associated with round prices are strong enough to cause a systematic delay in price adjustments even in a period of a runaway inflation, when 85 percent of the prices change every month.

Keywords: Sticky Prices; Rigid Prices; 0-Ending Price Points; 9-Ending Price points; Runaway Inflation; Cost of Price Adjustment; Menu Cost; Hyperinflation (search for similar items in EconPapers)
Date: 2021
New Economics Papers: this item is included in nep-mac and nep-mon
Note: View the original document on HAL open archive server: https://hal.science/hal-03213312v2
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Published in Economics Letters, inPress, Forthcoming

Downloads: (external link)
https://hal.science/hal-03213312v2/document (application/pdf)

Related works:
Journal Article: Stuck at zero: Price rigidity in a runaway inflation (2021)
Journal Article: Stuck at Zero: Price Rigidity in a Runaway Inflation (2021)
Working Paper: Stuck at Zero: Price Rigidity in a Runaway Inflation (2021)
Working Paper: Stuck at Zero: Price Rigidity in a Runaway Inflation (2021)
Working Paper: Stuck at Zero: Price Rigidity in a Runaway Inflation (2021)
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:hal:journl:hal-03213312

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().