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The Changing Picture of Production Prices: an Analysis using Production Price Quotes

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  • Erwan Gautier

    (Banque de France and GRECSTA)

Abstract

Over the period 1994-2005, industrial production prices changed on average every six months, and business-service prices every twelve months. Furthermore, production price changes are rather small: falls and rises amount to around 4% on average. A little more than 40% of price changes are decreases. The main determinants of price changes are calendar effects (periods when contracts are signed between companies) and changes of the overall production price index. The position in the sectoral economic cycle and the cost of raw materials also influence the decision of price change. The sectoral market structure also seems to act as a shock absorber: in the most concentrated sectors, prices are less responsive to economic changes. It seems that overall price changes are more determined by the difference between the number of price increases and the number of price decreases than by the size of price increases or decreases.

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File URL: http://www.insee.fr/fr/ffc/docs_ffc/ES407a.pdf
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Bibliographic Info

Article provided by Institut National de la Statistique et des Etudes Economiques in its journal Economie et Statistique.

Volume (Year): 407 (2008)
Issue (Month): (April)
Pages: 3-26

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Handle: RePEc:crs:ecosta:es407a

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Related research

Keywords: Price Stickiness; Price Duration; Producer Price Index; Frequency of Price Change;

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References

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