Temporal Distribution of Price Changes: Staggering in the Large and Synchronization in the Small
Emmanuel Dhyne () and
Working Paper series from Rimini Centre for Economic Analysis
Temporal distribution of individual price changes is of crucial importance for business cycle theory and for the microfoundations of price adjustment. While it is routinely assumed that price changes are staggered over time, both theory and evidence are ambiguous. We use a large Belgian data set to analyze whether price changes are staggered or synchronized. We find that the more aggregated are the data, the closer is the distribution to perfect staggering. This result holds both for aggregation across goods, and across locations. Our results provide support for BhaskarÃ•s (2002) model of synchronized adjustment within, and staggered adjustment across, industries.
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Working Paper: Temporal Distribution of Price Changes: Staggering in the Large and Synchronization in the Small (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:rim:rimwps:01_07
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