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The Price Setting Behavior in Colombia:Evidence from PPI Micro Data

  • Juan Manuel Julio

    ()

  • Héctor Manuel Zárate

    ()

In this paper we explore the price setting behavior of Colombian producers and importersusing a unique database containing the monthly price reports underlying the ColombianPPI from Jun-1999 to Oct-2006. We focus on five particular questions: 1. Are pricessticky or flexible? 2. Is a price increase more likely than a decrease? 3. Are price changessynchronized? 4. Is the pricing rule state or time dependent? 5. Are price changes sizable?Answers to these questions provide some of the micro fundamentals for the design ofmonetary policy in this country.

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Paper provided by BANCO DE LA REPÚBLICA in its series BORRADORES DE ECONOMIA with number 004511.

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Length: 39
Date of creation: 31 Jan 2008
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Handle: RePEc:col:000094:004511
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