Are there downward nominal rigidities in product markets?
This paper looks at disaggregated price data in the UK to see if there is evidence of downward nominal rigidity: are prices less likely to fall after a downward shock than they are to rise after an upward shock? The test is to see if, as the mean inflation rate falls, the skewness, or the tendency for price changes to bunch-up at zero, rises. The paper finds no convincing evidence of downward nominal rigidity.
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