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Sticky prices and moderate inflation

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  • Hofstetter, Marc

Abstract

Recent evidence shows that there is great heterogeneity in the price setting frequency across sectors, and that those changing prices frequently do so even under low inflation. What happens to price setting strategies of sticky price goods under moderate inflation? We built a dataset of monthly newspaper and magazine prices for Colombia, for the period 1960-2005, an exceptional example of prolonged moderate inflation. Within this macroeconomic scenario, and the novel database, we study the frequency of price adjustment, the relative importance of time- and state-dependent theories, and their evolution as inflation declined from moderate rates to single digits.

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Bibliographic Info

Article provided by Elsevier in its journal Economic Modelling.

Volume (Year): 27 (2010)
Issue (Month): 2 (March)
Pages: 535-546

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Handle: RePEc:eee:ecmode:v:27:y:2010:i:2:p:535-546

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Web page: http://www.elsevier.com/locate/inca/30411

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Keywords: Sticky prices Moderate inflation Disinflation;

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References

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Cited by:
  1. Luis Eduardo Arango & Luz Karine Ardila & Miguel Ignacio Gömez, . "Efecto del cambio del salario mínimo en el precio de las comidas fuera del hogar en Colombia," Borradores de Economia 584, Banco de la Republica de Colombia.
  2. Juan Manuel Julio & Héctor Manuel Zárate & Manuel Dario Hernández, . "The Stickiness of Colombian Consumer Prices," Borradores de Economia 578, Banco de la Republica de Colombia.

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