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New Facts on Consumer Price Rigidity in the Euro Area

Author

Listed:
  • Erwan Gautier
  • Cristina Conflitti
  • Riemer P. Faber
  • Brian Fabo
  • Ludmila Fadejeva
  • Valentin Jouvanceau
  • Jan-Oliver Menz
  • Teresa Messner
  • Pavlos Petroulas
  • Pau Roldan-Blanco
  • Fabio Rumler
  • Sergio Santoro
  • Elisabeth Wieland
  • Hélène Zimmer

Abstract

Using CPI micro data for 11 euro area countries over 2010–2019, we document new findings on consumer price rigidity in the euro area: (i) the average frequency of price changes is 12 percent; (ii) the distribution of price changes is highly dispersed, with frequent large and small changes; (iii) price changes are more frequent in January; and (iv) the overall size of price changes rises with inflation, but their frequency does not; these changes in the size are driven by movements in the fraction of price changes that are increases, not by the absolute size of price increases or decreases.

Suggested Citation

  • Erwan Gautier & Cristina Conflitti & Riemer P. Faber & Brian Fabo & Ludmila Fadejeva & Valentin Jouvanceau & Jan-Oliver Menz & Teresa Messner & Pavlos Petroulas & Pau Roldan-Blanco & Fabio Rumler & Se, 2024. "New Facts on Consumer Price Rigidity in the Euro Area," American Economic Journal: Macroeconomics, American Economic Association, vol. 16(4), pages 386-431, October.
    • Handle: RePEc:aea:aejmac:v:16:y:2024:i:4:p:386-431
    DOI: 10.1257/mac.20220289
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    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms

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