Why Are Prices Sticky? Preliminary Results from an Interview Study
This paper reports preliminary results from a large research project on business pricing which is currently underway. The idea is to use interviews with actual price setters to assess the validity of a dozen theories of price stickiness. The rather unorthodox (for economists) methodology is defended; the research design is described briefly; and a few results based on the first 72 interviews (out of a projected 200) are presented. This sample suggests that the median firm changes its price annually and that price adjustments typically lag 3-4 months behind shocks to demand or cost.
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Volume (Year): 81 (1991)
Issue (Month): 2 (May)
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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Robert E. Hall, 1986. "Market Structure and Macroeconomic Fluctuations," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 17(2), pages 285-338.
- Robert J. Gordon, 1981.
"Output Fluctuations and Gradual Price Adjustment,"
NBER Working Papers
0621, National Bureau of Economic Research, Inc.
- N. Gregory Mankiw, 1985. "Small Menu Costs and Large Business Cycles: A Macroeconomic Model of Monopoly," The Quarterly Journal of Economics, Oxford University Press, vol. 100(2), pages 529-538.
- Alan S. Blinder, 1981.
"Inventories and Sticky Prices: More on the Microfoundations of Macroeconomics,"
NBER Working Papers
0620, National Bureau of Economic Research, Inc.
- Blinder, Alan S, 1982. "Inventories and Sticky Prices: More on the Microfoundations of Macroeconomics," American Economic Review, American Economic Association, vol. 72(3), pages 334-48, June.
- Rotemberg, Julio J, 1982. "Sticky Prices in the United States," Journal of Political Economy, University of Chicago Press, vol. 90(6), pages 1187-1211, December.
- Stiglitz, Joseph E, 1987. "The Causes and Consequences of the Dependence of Quality on Price," Journal of Economic Literature, American Economic Association, vol. 25(1), pages 1-48, March.
- Alan S. Blinder, 1990. "Learning by Asking Those Who Are Doing," Eastern Economic Journal, Eastern Economic Association, vol. 16(4), pages 297-306, Oct-Dec.
- Russell Cooper & Andrew John, 1988. "Coordinating Coordination Failures in Keynesian Models," The Quarterly Journal of Economics, Oxford University Press, vol. 103(3), pages 441-463.
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