Evidence on price adjustment costs in U.S. manufacturing industry
AbstractThis paper investigates the degree of rigidity in prices of manufactured products in the United States, conditional on labor costs. The author extends Julio J. Rotemberg's model of quadratic price-adjustment costs and finds that prices are costly to adjust: after a year, about 40 percent of adjustment remains to be completed for aggregate manufacturing, while for some industries the adjustment is twice as slow. But manufacturing prices are less sluggish than prices in the U.S. economy as a whole. Thus, nominal rigidity in other markets, such as those for services or labor, may be important. Copyright 1992 by Oxford University Press.
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Bibliographic InfoPaper provided by Board of Governors of the Federal Reserve System (U.S.) in its series Working Paper Series / Economic Activity Section with number 89.
Date of creation: 1988
Date of revision:
Other versions of this item:
- Roberts, John M, 1992. "Evidence on Price Adjustment Costs in U.S. Manufacturing Industry," Economic Inquiry, Western Economic Association International, vol. 30(3), pages 399-417, July.
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- Roberts John M., 2005.
"How Well Does the New Keynesian Sticky-Price Model Fit the Data?,"
The B.E. Journal of Macroeconomics,
De Gruyter, vol. 5(1), pages 1-39, September.
- John M. Roberts, 2001. "How well does the New Keynesian sticky-price model fit the data?," Finance and Economics Discussion Series 2001-13, Board of Governors of the Federal Reserve System (U.S.).
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