Dynamics of Price Adjustments: Evidence From Micro Level Data For Chile
AbstractThis paper characterizes the dynamics of price adjustments in Chile using data at the establishment level of goods in the CPI basket. Our results show that nominal rigidities are lower when measured at micro-level compared to estimates based on macro data. The frequency of price adjustments appears to be relatively stable over the sample period 1999-2005. On the other hand, if we decompose price adjustments in upward and downward changes, we observe that these frequencies of adjustments for some groups of products are correlated with the level of aggregate inflation. Thus, the data shows that the intensive and extensive margins of price adjustment play a role in determining price dynamics. Finally, we find a considerable degree of synchronization in price adjustments across establishments and a moderate increase in price dispersion since 1999.
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Bibliographic InfoArticle provided by Central Bank of Chile in its journal Economía Chilena.
Volume (Year): 10 (2007)
Issue (Month): 2 (August)
Other versions of this item:
- Juan Pablo Medina & David Rappoport & Claudio Soto, 2007. "Dynamics of Price Adjustments: Evidence From Micro Level Data for Chile," Working Papers Central Bank of Chile 432, Central Bank of Chile.
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- Klenow, Peter J. & Malin, Benjamin A., 2010.
"Microeconomic Evidence on Price-Setting,"
Handbook of Monetary Economics,
in: Benjamin M. Friedman & Michael Woodford (ed.), Handbook of Monetary Economics, edition 1, volume 3, chapter 6, pages 231-284
- M. Utku Ozmen & Orhun Sevinc, 2011. "Price Rigidity In Turkey : Evidence From Micro Data," Working Papers 1125, Research and Monetary Policy Department, Central Bank of the Republic of Turkey.
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