A State-Dependent Model of Intermediate Goods Pricing

Brent Neiman

No 16283, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Recent analyses of transaction-level datasets have generated new stylized facts on price setting and greatly influenced the empirical open- and closed-economy macroeconomics literatures. This work has uncovered marked heterogeneity in price stickiness, demonstrated that even non-zero price changes do not fully "pass through" exchange rate shocks, and offered evidence of synchronization in the timing of price changes. Further, intrafirm prices have been shown to differ from arm's length prices in each of these characteristics. This paper develops a state-dependent model of intermediate goods pricing, which allows for arm's length and intrafirm transactions, and is capable of generating these empirical pricing patterns.

JEL-codes: E3 F1 L11 (search for similar items in EconPapers)
Date: 2010-08
Note: IFM ITI ME
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Citations: View citations in EconPapers (1)

Published as Brent, Neiman, 2011. "A state-dependent model of intermediate goods pricing," Journal of International Economics, Elsevier, vol. 85(1), pages 1-13, September.

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Journal Article: A state-dependent model of intermediate goods pricing (2011)
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