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A State-Dependent Model of Intermediate Goods Pricing

Author

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  • Brent Neiman

    (Professor of Economics, Booth School of Business; Director of BFI International Finance, Macro and Trade Initiative)

Abstract

Recent analyses of transaction-level datasets have generated new stylized facts on price setting and greatly influenced the empirical macroeconomics literature. This work has uncovered marked heterogeneity in price stickiness, demonstrated that even non-zero price changes do not fully "pass through" cost shocks, and offered evidence of synchronization in the timing of price changes. Further, intrafirm prices have been shown to differ from arm's length prices in each of these characteristics. This paper develops a state-dependent model of intermediate goods pricing, which allows for arm's length and intrafirm transactions, and is capable of generating these empirical pricing patterns.

Suggested Citation

  • Brent Neiman, 2009. "A State-Dependent Model of Intermediate Goods Pricing," Working Papers 2010-006, Becker Friedman Institute for Research In Economics.
  • Handle: RePEc:bfi:wpaper:2010-006
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Alberto Cavallo & Brent Neiman & Roberto Rigobon, 2014. "Currency Unions, Product Introductions, and the Real Exchange Rate," The Quarterly Journal of Economics, Oxford University Press, vol. 129(2), pages 529-595.
    2. repec:pal:imfecr:v:65:y:2017:i:3:d:10.1057_s41308-017-0037-1 is not listed on IDEAS
    3. Mongey, Simon, 2017. "Market Structure and Monetary Non-neutrality," Staff Report 558, Federal Reserve Bank of Minneapolis.
    4. Neiman, Brent, 2010. "Stickiness, synchronization, and passthrough in intrafirm trade prices," Journal of Monetary Economics, Elsevier, vol. 57(3), pages 295-308, April.
    5. Logan Lewis, 2013. "Menu Costs, Trade Flows, and Exchange Rate Volatility," 2013 Meeting Papers 313, Society for Economic Dynamics.
    6. Simon Mongey, 2017. "Market Structure and Monetary Non-Neutrality," 2017 Meeting Papers 184, Society for Economic Dynamics.
    7. repec:eee:iburev:v:26:y:2017:i:6:p:1034-1050 is not listed on IDEAS

    More about this item

    JEL classification:

    • E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles
    • F1 - International Economics - - Trade
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms

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