Price setting behaviour in the Netherlands: results of a survey

Hoeberichts, Marco; Stokman, Ad

doi:10.1002/mde.1478

Cited by 25 publications

(11 citation statements)

References 18 publications

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“…By modifying a New Keynesian business cycle model (by including a labor market with matching frictions and rigid wages), Christoffel and Linzert (2005) show that the more rigid wages are the more persistent inflation is. Hoeberichts and Stokman (2010) find that especially in the services sector, wages are relevant for price setting behavior of firms. As an indicator for this degree of flexibility we include "Flexibility of wage determination" (source: GCR, WEF).…”

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confidence: 96%

Optimal central bank transparency

Cruijsen

Eijffinger

Hoogduin

2010

Journal of International Money and Finance

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Optimal Central Bank transparencyvan der Cruijsen, C.A.B.; Eijffinger, Sylvester; Hoogduin, L.H. Published in: Journal of International Money and Finance Document version:Early version, also known as pre-print General rightsCopyright and moral rights for the publications made accessible in the public portal are retained by the authors and/or other copyright owners and it is a condition of accessing publications that users recognise and abide by the legal requirements associated with these rights.-Users may download and print one copy of any publication from the public portal for the purpose of private study or research -You may not further distribute the material or use it for any profit-making activity or commercial gain -You may freely distribute the URL identifying the publication in the public portal Take down policy If you believe that this document breaches copyright, please contact us providing details, and we will remove access to the work immediately and investigate your claim. b s t r a c tShould central banks increase their degree of transparency any further? We show that there is likely to be an optimal intermediate degree of central bank transparency. Up to this optimum more transparency is desirable: it improves the quality of private sector inflation forecasts. But beyond the optimum people might: (1) start to attach too much weight to the conditionality of their forecasts, and/or (2) get confused by the large and increasing amount of information they receive. This deteriorates the (perceived) quality of private sector inflation forecasts. As a result, inflation is set in a more backward looking manner resulting in higher inflation persistence. By using a large scale panel data set on the transparency of central banks we find empirical support for an optimal intermediate degree of transparency at which inflation persistence is minimized. Our results indicate that while several central banks would benefit from further transparency increases, some already have reached the optimal level.

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confidence: 96%

Optimal central bank transparency

Cruijsen

Eijffinger

Hoogduin

2010

Journal of International Money and Finance

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“…In addition, competition stances or failures in coordination among firms could make a firm not willing to change the price of its products for fear that competitors will not do the same. Finally, different pricing behavior could be a consequence of the traditionally studied implication of high costs (menu costs) for changing prices, which are different among firms [Hoeberichts and Stokman (2006)]. 3,4 One study that is particularly relevant for this paper is Coibion and Gorodnichenko (2011), where the authors solve and estimate a traditional NK DSGE model with flexible wages but heterogeneity in the price setting behavior among firms.…”

Section: Evidence Of Heterogeneity In Price and Wage Settingmentioning

confidence: 99%

Heterogeneity in Wage Setting Behavior in a New-Keynesian Model

2019

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In this paper we estimate a New-Keynesian dynamic stochastic general equilibrium (NK DSGE) model with heterogeneity in price and wage setting behavior. In a recent study, Coibion and Gorodnichenko develop a DSGE model, in which firms follow four different types of price setting schemes: sticky prices, sticky information, rule-of-thumb, or flexible prices. We enrich Coibion and Gorodnichenko framework by incorporating heterogeneity in nominal wage setting behavior among households. We solve this DSGE model and estimate it using Bayesian techniques for the US economy from 1955 to 2008. The estimation results show the relevance of heterogeneity in wage setting among households. More importantly, we identify qualitative and quantitative business cycle features allowed by the heterogeneity in wage rigidity, such as the persistence in price and wage inflation, which a standard NK model with only Calvo-type wage rigidity fails to achieve. We also show that modeling wage-rigidity heterogeneity—as opposed to standard Calvo wages—amplifies the macroeconomic output fluctuations resulting from a technology shock while it mitigates the output fluctuations following a monetary tightening.

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“…4); Hoeberichts and Stokman support it for the Dutch survey (see Fabiani et al, 2007, ch. 9) and for a new Dutch cross-section firm survey (see Hoeberichts and Stokman, 2010). Hall et al (2000) find for a separate UK survey that companies operating in more competitive markets review and change prices more often.…”

Section: 15mentioning

confidence: 99%

“…27 Hoeberichts and Stokman (2010) report for a firm survey on price setting behavior in the Netherlands that the self-reported degree of competition is strongly correlated with the importance attached by firms to changes in competitors' prices. 28 One might argue that the subjective nature of the variable makes it not suitable for cross-firm comparisons.…”

Section: Data and Econometric Modelmentioning

confidence: 99%

Sticky Prices, Competition and the Phillips Curve

Mikosch¹

2012

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. find that the latter effect clearly dominates and plays an important role in explaining price stickiness. The effect of a marginal increase in economic activity on the likelihood of a price increase is between 63% and 85% lower for products, that face very strong competition, compared to products, that face very weak competition. In line with the theory, prices of products, that face very strong competition, are also less likely to decrease in response to marginal decreases in economic activity. Moreover, it heavily depends on the degree of competition that a product faces whether, and to what extent, the micro Phillips curve is non-linear. The stronger the competition the weaker will be the non-linearity of the micro Phillips curve. My findings imply that effective business cycle policy necessitates good competition policy. Reforms which strengthen the competition in an economy will make stimulus or stabilization policy more effective. Furthermore, the results imply that stimulus or stabilization measures, that target specifically high competition firms or sectors, may be more effective than programs, that follow an indiscriminate all-round principle. Terms of use: Documents inJEL codes: E31, E32

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Price setting behaviour in the Netherlands: results of a survey

Cited by 25 publications

References 18 publications

Optimal central bank transparency

Optimal central bank transparency

Heterogeneity in Wage Setting Behavior in a New-Keynesian Model

Sticky Prices, Competition and the Phillips Curve

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