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Consumer Price Setting in Italy

  • Silvia Fabiani

    ()

    (Bank of Italy)

  • Angela Gattulli

    ()

    (Bank of Italy)

  • Roberto Sabbatini

    ()

    (Bank of Italy)

  • Giovanni Veronese

    ()

    (Bank of Italy)

This paper investigates the microeconomic behaviour of consumer prices in Italy using the individual price records collected by Istat. We discuss how to analyse price stickiness and we compute a quantitative measure of the unconditional degree of price rigidity. Prices are found to be rather sticky, remaining unchanged on average for around 10 months; price spells last longer for non-energy industrial goods and services, much less for energy products. Prices are revised more frequently upwards than downwards, while the size of price changes is quite symmetric. Price stickiness is less marked in large modern stores than in traditional shops. Price changes are quite synchronized, in particular in the services sector.

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Article provided by GDE (Giornale degli Economisti e Annali di Economia), Bocconi University in its journal Giornale degli Economisti e Annali di Economia.

Volume (Year): 65 (2006)
Issue (Month): 1 (May)
Pages: 31-74

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Handle: RePEc:gde:journl:gde_v65_n1_p31-74
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