Producer and consumer price rigidity: the case of Lithuania

Valentin Jouvanceau

No 27, Bank of Lithuania Discussion Paper Series from Bank of Lithuania

Abstract: I provide the first statistics on producer and consumer price rigidity in Lithuania based on HICP and PPI item-level databases covering about 73% and 99.5% of their respective weights between 2010 and 2018. Producer prices are much more flexible than consumer prices, with an average monthly frequency of price change of 58% versus 18%. Contrariwise, the average size of price increases and decreases is higher in the HICP, reaching about 17-18% in absolute terms, whereas it is 7.5% in the PPI. In both price families, changes in item-level inflation are primarily due to variations in the size of price changes. However, the sources of these size changes are substantially shaped by shifts in the share of the number of price increases in the total.

Keywords: : Price rigidity; price-setting; producer prices; consumer prices (search for similar items in EconPapers)
JEL-codes: D40 E31 E50 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2022-04-04
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Citations: View citations in EconPapers (2)

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