Temporal Distribution of Price Changes: Staggering in the Large and Synchronization in the Small

Dhyne, Emmanuël; Konieczny, Jerzy

doi:10.2139/ssrn.1687540

Cited by 99 publications

(13 citation statements)

References 92 publications

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“…Apparently, synchronisation is more pronounced when the goods produced in a particular sector are more homogeneous compared to a higher aggregate. This …nding is in line with Dhyne and Konieczny (2006) who conduct a rigorous analysis of this phenomenon for Belgian consumer prices. It is also in line with our …nding, that, apart from its seasonal pattern, there is not much time variation in the observed aggregate frequency of price change.…”

Section: Time Variation In the Frequency Of Price Adjustmentsupporting

confidence: 87%

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The Patterns and Determinants of Price Setting in the Belgian Industry

2006

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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. Terms of use: Documents in WO R K I N G PA P E R S E R I E S The Eurosystem Inflation Persistence NetworkThis paper reflects research conducted within the Inflation Persistence Network (IPN), a team of Eurosystem economists undertaking joint research on inflation persistence in the euro area and in its member countries. The research of the IPN combines theoretical and empirical analyses using three data sources: individual consumer and producer prices; surveys on firms' price-setting practices; aggregated sectoral, national and area-wide price indices. Patterns, causes and policy implications of inflation persistence are addressed.Since June 2005 the IPN is chaired by Frank Smets; Stephen Cecchetti (Brandeis University), Jordi Galí (CREI, Universitat Pompeu Fabra) and Andrew Levin (Board of Governors of the Federal Reserve System) act as external consultants and Gonzalo Camba-Méndez as Secretary.The refereeing process is co-ordinated by a team composed of Günter Coenen (Chairman), Stephen Cecchetti, Silvia Fabiani, Jordi Galí, Andrew Levin, and Gonzalo Camba-Méndez. The paper is released in order to make the results of IPN research generally available, in preliminary form, to encourage comments and suggestions prior to final publication. The views expressed in the paper are the author's own and do not necessarily reflect those of the Eurosystem. C O N T E N T SAbstract 4 Non-technical summary 5

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Section: Time Variation In the Frequency Of Price Adjustmentsupporting

confidence: 87%

“…17 For the sample as a whole, more than 120,000 records per month are observed in the raw database. The main di¤erences between both data sets are listed below.…”

Section: Ecb Working Paper Series No 618mentioning

confidence: 99%

The Patterns and Determinants of Price Setting in the Belgian Industry

2006

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“…Again, our results do not change due to this modification, in particular with respect to synchronization. 26 25 This result is similar to that of Cornille and Dossche (2008) and Dhyne and Konieczny (2007) who use the Belgian PPI and the CPI respectively. They use the Fisher-Konieczny measure of synchronization and find that prices tend to be more synchronized at a more disaggregated industry level.…”

Section: Pooled Datasupporting

confidence: 70%

Multiproduct Firms and Price-Setting: Theory and Evidence from U.S. Producer Prices

Bhattarai

Schoenle

2011

gwp

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In this paper, we establish three new facts about price-setting by multi-product firms and contribute a model that can explain our findings. Our findings have important implications for real effects of nominal shocks and provide guidance for how to model pricing decisions of firms. On the empirical side, using micro-data on U.S. producer prices, we first show that firms selling more goods adjust their prices more frequently but on average by smaller amounts. Moreover, the higher the number of goods, the lower is the fraction of positive price changes and the more dispersed the distribution of price changes. Second, we document substantial synchronization of price changes within firms across products and show that synchronization plays a dominant role in explaining pricing dynamics. Third, we find that within-firm synchronization of price changes increases as the number of goods increases. On the theoretical side, we present a state-dependent pricing model where multiproduct firms face both aggregate and idiosyncratic shocks. When we allow for firm-specific menu costs and trend inflation, the model matches the empirical findings.

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“…See also Cornille and Dossche (). Dhyne and Konieczny () find a similar result for consumer prices. They also emphasize the importance of geographical aggregation, with synchronization being the highest at the city level.…”

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confidence: 56%