Inflation and Relative Price Variability: New Evidence for the United States
AbstractThis article provides new evidence on the empirical relationship between inflation and relative prices in the United States. In line with the predictions of recent monetary search models, we find that the impact of expected inflation on relative price variability (RPV) has disappeared during the recent period when inflation expectations have been stabilized on a low level. Endogenous break-point tests are applied to identify the timing and to confirm the significance of the changing role of inflation for RPV. The empirical findings are robust with respect to different price indices, disaggregation levels, and measurement concepts.
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Bibliographic InfoArticle provided by Southern Economic Association in its journal Southern Economic Journal.
Volume (Year): 76 (2009)
Issue (Month): 1 (July)
Find related papers by JEL classification:
- E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
- C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models &bull Diffusion Processes
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- Sascha S. Becker & Dieter Nautz, 2010.
"Inflation, Price Dispersion and Market Integration through the Lens of a Monetary Search Model,"
SFB 649 Discussion Papers
SFB649DP2010-058, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
- Becker, Sascha S. & Nautz, Dieter, 2012. "Inflation, price dispersion and market integration through the lens of a monetary search model," European Economic Review, Elsevier, vol. 56(3), pages 624-634.
- Becker, Sascha & Nautz, Dieter, 2010. "Inflation, price dispersion and market integration through the lens of a monetary search model," Discussion Papers 2010/2, Free University Berlin, School of Business & Economics.
- Sven Schreiber & Juliane Scharff, 2008.
"Evidence on the effects of inflation on price dispersion under indexation,"
IMK Working Paper
12-2008, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
- Juliane Scharff & Sven Schreiber, 2012. "Evidence on the effects of inflation on price dispersion under indexation," Empirical Economics, Springer, vol. 43(1), pages 291-311, August.
- Sascha S. Becker, 2011. "What Drives the Relationship Between Inflation and Price Dispersion? Market Power vs. Price Rigidity," SFB 649 Discussion Papers SFB649DP2011-019, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
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