Dynamics of the U.S. Price Distribution

David Berger and Joseph Vavra

No 21732, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We use microdata underlying U.S. consumer, producer and import price indices to document how the distribution of price changes evolves over time. Two striking features characterize pricing at each stage of production: 1) Frequency is countercyclical. 2) Frequency is correlated with variance. Conversely, other statistics which have received recent attention, like kurtosis, do not exhibit uniform patterns across our datasets. What implications do our empirical results have for monetary policy? Using a flexible accounting framework which collapses the high-dimensional distribution of price changes into a single measure of aggregate price flexibility, we show that flexibility is highly variable and countercyclical.

JEL-codes: E3 E31 E32 E5 E52 L16 (search for similar items in EconPapers)
Date: 2015-11
New Economics Papers: this item is included in nep-mac
Note: EFG IO ME
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Citations: View citations in EconPapers (17)

Published as David Berger & Joseph Vavra, 2018. "Dynamics of the U.S. price distribution," European Economic Review, vol 103, pages 60-82.

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Journal Article: Dynamics of the U.S. price distribution (2018)
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