A Framework for Identifying the Sources of Local-Currency Price Stability with an Empirical Application

Pinelopi Goldberg and Rebecca Hellerstein

No 625, 2006 Meeting Papers from Society for Economic Dynamics

Abstract: The inertia of the local-currency prices of traded goods in the face of exchange-rate changes is a well-documented phenomenon in International Economics.This paper develops a frame-work for identifying the sources of local-currency price stability at each stage of the distribution chain. The empirical approach exploits manufacturers’ and retailers’ first-order conditions in conjunction with detailed information on the frequency of price adjustments in response to exchange-rate changes, in order to quantify the relative importance of nominal price rigidities, local-cost non-traded components, and markup adjustment by manufacturers and retailers in the incomplete transmission of exchange-rate changes to prices. The approach is applied to microdata from the beer market

Keywords: menu costs; nominal rigidities; local-currency price stability (search for similar items in EconPapers)
JEL-codes: F1 F2 F3 F4 (search for similar items in EconPapers)
Date: 2006
New Economics Papers: this item is included in nep-cba
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

Downloads: (external link)
https://www.red-files-public.s3.amazonaws.com/meetpapers/2006/paper_625.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found

Related works:
Working Paper: A Framework for Identifying the Sources of Local-Currency Price Stability with an Empirical Application (2008)
Working Paper: A framework for identifying the sources of local currency price stability with an empirical application (2007)
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:red:sed006:625

Access Statistics for this paper

More papers in 2006 Meeting Papers from Society for Economic Dynamics Contact information at EDIRC.
Bibliographic data for series maintained by Christian Zimmermann ().