Explaining cross-industry heterogeneity in price stickiness
AbstractThis note explains cross industry heterogeneity in the frequency of price adjustment. We use the quasi-maximum approach of Papke and Wooldridge (1996) to avoid the shortcomings of OLS regressions to analyse frequencies. We pay particular attention to the role of costs and market competition in explaining cross-industry differences. We find that prices are stickier the higher the labour cost share and the lower are competition and the intermediate input share.
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Bibliographic InfoArticle provided by AccessEcon in its journal Economics Bulletin.
Volume (Year): 31 (2011)
Issue (Month): 1 ()
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producer prices; frequency of price changes; market competition; cost structure;
Find related papers by JEL classification:
- E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles
- D4 - Microeconomics - - Market Structure and Pricing
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