The Kinked Demand Curve and Price Rigidity: Evidence from Scanner Data*

Dossche, Maarten; Heylen, Freddy; Poel, Dirk Van den

doi:10.1111/j.1467-9442.2010.01621.x

Cited by 55 publications

(40 citation statements)

References 59 publications

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“…Our estimates are also broadly in line though slightly higher than those of Coenen,Levin,and Christoffel 19 For example, for a very high markup, such as the one estimated by Dossche, Heylen, and den Poel (2007), the variation in the desired markup can be substantial without much variation in the demand elasticity.…”

supporting

confidence: 75%

“…Although our estimates suggest that those discussed in Chari, Kehoe, and McGrattan (2000) are high, a number of researchers use calibrations that are validated by our results. In contrast, Dossche, Heylen, and den Poel (2007) use scanner data from a euro-area supermarket chain to argue that most calibrations of the Kimball (1995) aggregator impose too high a value of…”

mentioning

confidence: 99%

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International Competition and Inflation: A New Keynesian Perspective

Guerrieri

Gust

López‐Salido

2010

American Economic Journal: Macroeconomics

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We develop and estimate an open economy New Keynesian Phillips curve (NKPC) in which variable demand elasticities give rise to changes in desired markups in response to changes in competitive pressure from abroad. A parametric restriction on our specification yields the standard NKPC, in which the elasticity is constant, and there is no role for foreign competition to influence domestic inflation. By comparing the unrestricted and restricted specifications, we provide evidence that foreign competition plays an important role in accounting for the behavior of inflation in the traded goods sector. Our estimates suggest that foreign competition has lowered domestic goods inflation about 1 percentage point over the 2000-2006 period. Our results also provide evidence against demand curves with a constant elasticity in the context of models of monopolistic competition.JEL classification: F41, E31, E32

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supporting

confidence: 75%

mentioning

confidence: 99%

International Competition and Inflation: A New Keynesian Perspective

Guerrieri

Gust

López‐Salido

2010

American Economic Journal: Macroeconomics

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“…We set at 0.6, cf. section 1, It is possible that 25 is still too high a value for , at least according to the evidence provided by Dossche et al (2006). They suggest that a value around 4 is more reasonable, though they …nd evidence of considerable variation across sectors.…”

Section: Adding Real Rigiditiesmentioning

confidence: 90%

“…As noted by Dossche et al (2006), there is no agreement on what a plausible value might be for this parameter in the literature; estimates range from 1.3 (Bergin and Feenstra, 2000) to 471 (Kimball, 1995). In this section we therefore calibrate " by …xing values for the slope of the New Keynesian Phillips curve, , and the degree of nominal rigidity, .…”

Section: Adding Real Rigiditiesmentioning

confidence: 99%

Fiscal Shocks and Real Rigidities

Furlanetto¹,

Seneca²

2009

The B.E. Journal of Macroeconomics

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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. The Working Papers of Danmarks Nationalbank describe research and development, often still ongoing, as a contribution to the professional debate. Terms of use: Documents inThe viewpoints and conclusions stated are the responsibility of the individual contributors, and do not necessarily reflect the views of Danmarks Nationalbank.As a general rule, Working Papers are not translated, but are available in the original language used by the contributor.Danmarks Nationalbank's Working Papers are published in PDF format at www.nationalbanken.dk. A free electronic subscription is also available at this Web site.The subscriber receives an e-mail notification whenever a new Working Paper is published. Text may be copied from this publication provided that Danmarks Nationalbank is specifically stated as the source. Changes to or misrepresentation of the content are not permitted.Nationalbankens Working Papers beskriver forsknings-og udviklingsarbejde, ofte af foreløbig karakter, med henblik på at bidrage til en faglig debat.Synspunkter og konklusioner står for forfatternes regning og er derfor ikke nødvendigvis udtryk for Nationalbankens holdninger.Working Papers vil som regel ikke blive oversat, men vil kun foreligge på det sprog, forfatterne har brugt.Danmarks Nationalbanks Working Papers er tilgaengelige på Internettet www.nationalbanken.dk i pdfformat. På webstedet er det muligt at oprette et gratis elektronisk abonnement, der leverer en e-mail notifikation ved enhver udgivelse af et Working Paper. JEL Classi…cation: E32, E62.

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“…The most widely used models adopt a specification of the system of demand equations in which the dependent variables are the budget shares of the consumption categories of interest. Among them, the linear approximation to the Almost Ideal Demand System (LA-AIDS) of Deaton and Muellbauer (1980) has enjoyed immense popularity because it can be estimated using linear models (Dossche et al 2010).…”

Section: Theoretical Framework: Expectile Aidsmentioning

confidence: 99%

Beyond the mean: Estimating consumer demand systems in the tails

Furno¹,

Caracciolo²

2017

AGR ECON-CZECH

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Th e study proposes a novel approach to estimate price demand elasticities at the various levels of expenditures. Th rough the expectile estimator, the demand system can be estimated not only at the mean, as is generally done when implementing the OLS, but also at the lower and higher levels of expenditure. A simple demand system of equations focusing on fi ve basic goods: Food, Recreation, Clothing, Transport, Rent, using the Canadian Family Expenditure Survey data was estimated. Th e comparison of the estimated elasticity of each commodity at the selected expectiles is tested to verify the statistical relevance of any diff erence among the estimates in the tails and those computed at the centre of the conditional distribution. Th e results show with a strong evidence that the elasticity of Food and Recreation grows across the expectiles. Clothing variations are less evident, while the Transport and Rent elasticity is basically constant across the expectiles.

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The Kinked Demand Curve and Price Rigidity: Evidence from Scanner Data*

Cited by 55 publications

References 59 publications

International Competition and Inflation: A New Keynesian Perspective

International Competition and Inflation: A New Keynesian Perspective

Fiscal Shocks and Real Rigidities

Beyond the mean: Estimating consumer demand systems in the tails

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