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Sticky Prices and Moderate Inflation

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  • Marc Hofstetter

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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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File URL: http://economia.uniandes.edu.co/publicaciones/dcede2008-20.pdf
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Bibliographic Info

Paper provided by UNIVERSIDAD DE LOS ANDES-CEDE in its series DOCUMENTOS CEDE with number 005856.

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Length: 30
Date of creation: 30 Sep 2008
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Handle: RePEc:col:000089:005856

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Keywords: Sticky Prices; Moerate Inflation; Disinflation;

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References

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Cited by:
  1. Juan Manuel Julio & Héctor Manuel Zárate & Manuel Dario Hernández, 2010. "The Stickiness of Colombian Consumer Prices," ENSAYOS SOBRE POLÍTICA ECONÓMICA, BANCO DE LA REPÚBLICA - ESPE.
  2. Luis Eduardo Arango & Luz Karine Ardila & Miguel Igancio Gómez, 2010. "Efecto del cambio del salario mínimo en el precio de las comidas fuera del hogar en Colombia," BORRADORES DE ECONOMIA 006621, BANCO DE LA REPÚBLICA.

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