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The Cyclicality of Sales, Regular and Effective Prices: Business Cycle and Policy Implications: Reply

Author

Listed:
  • Olivier Coibion
  • Yuriy Gorodnichenko
  • Gee Hee Hong

Abstract

We address how using different censoring thresholds and imputation procedures affects the baseline results of Coibion, Gorodnichenko, and Hong (2015). Higher censoring thresholds introduce measurement error and outliers that generate wide variability in results across weighting schemes, but methods that explicitly control for outliers confirm the results of Coibion et al. (2015) for all censoring thresholds. We also illustrate how the BLS's approach to imputing missing prices can introduce a cyclical bias into measures of posted price inflation when store-switching is present in the data.

Suggested Citation

  • Olivier Coibion & Yuriy Gorodnichenko & Gee Hee Hong, 2019. "The Cyclicality of Sales, Regular and Effective Prices: Business Cycle and Policy Implications: Reply," American Economic Review, American Economic Association, vol. 109(1), pages 314-324, January.
    • Handle: RePEc:aea:aecrev:v:109:y:2019:i:1:p:314-24
    Note: DOI: 10.1257/aer.20171338
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    Citations

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    Cited by:

    1. Yoshiyuki Kurachi & Kazuhiro Hiraki & Shinichi Nishioka, 2016. "Does a Higher Frequency of Micro-level Price Changes Matter for Macro Price Stickiness?: Assessing the Impact of Temporary Price Changes," Bank of Japan Working Paper Series 16-E-9, Bank of Japan.

    More about this item

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce

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