More Facts About Prices: France before and during the Great Recession

Failing to Forecast Low Inflation and Phillips Curve Instability: A Euro‐Area Perspective

“…For example, for Italy, Fabiani and Porqueddu (2013) show that in the period between 2006 and 2012 the average duration of consumer prices in Italy has indeed declined to 5 months, from 8 months between 1996 and 2001, indicating that increased sensitivity of prices to cyclical conditions might be partly accounted for by lower nominal rigidities. On the other hand, Berardi et al (2013) find that during the Great Recession, the patterns of price adjustment in France were only slightly modified: the frequency, average size and dispersion of price decreases increased only marginally. 15 Ongoing research at the 15 Using the CPI research database collected by the Bureau of Labor Statistics, Vavra (2013) explores the business cycle properties of the distribution of price changes in the US and finds that while price change dispersion (i.e., the second moment of the price change distribution) is strongly countercyclical, the rise in the frequency of adjustment during recessions is modest.…”

“…For example, for Italy, Fabiani and Porqueddu () show that in the period between 2006 and 2012 the average duration of consumer prices in Italy has indeed declined to 5 months, from 8 months between 1996 and 2001, indicating that increased sensitivity of prices to cyclical conditions might be partly accounted for by lower nominal rigidities. On the other hand, Berardi et al () find that during the Great Recession, the patterns of price adjustment in France were only slightly modified: the frequency, average size and dispersion of price decreases increased only marginally . Ongoing research at the Eurosystem level through a new wave of the Wage Dynamics Network will provide better data and more evidence on this issue.…”

Working Less and Bargain Hunting More: Macroimplications of Sales during Japan's Lost Decades

“…In fact, Guimaraes and Sheedy (2011, hereafter GS) develop a dynamic stochastic general equilibrium (DSGE) model incorporating sales and show that the real effect of monetary policy remains largely unchanged. Empirical studies such as Eichenbaum, Jaimovich, and Rebelo (2011), Anderson et al (2017), and Berardi, Gautier, and Le Bihan (2014) argue that retailers' decision to hold a sale is actually orthogonal to changes in macroeconomic conditions. However, in Japan, there is a negative secular link between the frequency of temporary sales and working hours.…”

The Determinants of Price Rigidity in the UK: Analysis of the CPI and PPI Microdata and Application to Macrodata Modelling

“…One alternative method to survival analysis is logit model, 2 the dependent variable of which is a dummy variable-whether or not the price changes-and the independent variables are similar to (or even the same as) those used in the survival analysis models. Logit model is used by Álvarez and Hernando (2004), Aucremanne and Dhyne (2005), Baumgartner et al (2005), Dhyne et al (2005), Hoffmann andKurz-Kim (2006), Baudry et al (2007) and Berardi et al (2015). 3 Undoubtedly, it is statistically superior to OLS which is used in Baharad and Eden (2004), but the logit model is essentially a cross-sectional econometric model which again ignores the panel structure of the price duration data.…”

“…UK. Other empirical studies on aspects of price setting behaviour have grown out of this, including Alvarez et al (2006), Álvarez and Burriel (2010), , , Costain and Nakov (2011), Vavra (2014) and Kara (2015) Berardi et al (2015), and Dixon and Tian (2017). The major contribution of this paper is to employ survival analysis (nonparametric, semi-parametric and parametric models) to understand how prices were set in the UK in the decade preceding the crisis.…”