IDEAS home Printed from https://ideas.repec.org/p/bcb/wpaper/638.html

An Organizational Structure Approach to Price Setting and Monetary Policy

Author

Listed:
  • Diogo Abry Guillen
  • Victor Monteiro

Abstract

We build a general equilibrium setup that embeds the organizational structure and its misalignment of incentives in the firm’s pricing decision. On the firm level, such a mechanism endogenously generates discrete prices and explains price stickiness. On the macro level, we derive a Phillips curve where the incentive-provision and the number of divisions of the firms drive its slope. Empirically, we take the model into a novel Brazilian retail daily database to estimate the parameters of the theoretical mechanism. Our model matches price-setting facts, such as the length of price spell, heterogeneity of price distribution, existence of small changes, and sales behavior.

Suggested Citation

  • Diogo Abry Guillen & Victor Monteiro, 2025. "An Organizational Structure Approach to Price Setting and Monetary Policy," Working Papers Series 638, Central Bank of Brazil, Research Department.
    • Handle: RePEc:bcb:wpaper:638
    as

    Download full text from publisher

    File URL: https://www.bcb.gov.br/content/publicacoes/WorkingPaperSeries/WP638.pdf
    Download Restriction: no
    ---><---

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bcb:wpaper:638. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Rodrigo Barbone Gonzalez (email available below). General contact details of provider: https://www.bcb.gov.br/en .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.