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Some evidence on factor intensity and price rigidity

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  • Peneva, Ekaterina
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    Abstract

    This paper establishes a new empirical finding: the degree of labor intensity and the degree of price flexibility are negatively correlated across industrial sectors in the U.S. economy. This finding suggests that varying factor intensity can potentially generate different degrees of price stickiness across sectors and remove the need to exogenously impose the latter. Of course, labor intensity is just one more feature--in addition to others like the durability of goods produced and the degree of competition--that can explain some of the heterogeneity in price durations across sectors.

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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of Economic Dynamics and Control.

    Volume (Year): 35 (2011)
    Issue (Month): 10 (October)
    Pages: 1652-1658

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    Handle: RePEc:eee:dyncon:v:35:y:2011:i:10:p:1652-1658

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    Web page: http://www.elsevier.com/locate/jedc

    Related research

    Keywords: Price rigidity Factor intensity;

    References

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