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Price setting before and during the pandemic: evidence from Swiss consumer prices

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  • Rudolf, Barbara
  • Seiler, Pascal

Abstract

We provide new evidence on price rigidity at the product level based on microdata underlying the Swiss consumer price index from 2008 to 2020. We find that the frequency of price changes has increased over the last decade, particularly among products where collection switched to online prices, reflecting the rise of e-commerce. Furthermore, price changes tend to be synchronized within rather than across stores. Time variations in inflation can be attributed mainly to variations in the frequency of both price increases and price decreases. In the first year of the pandemic, the frequency of price adjustments changed little on average, while temporary sales responded countercyclically to the respective demand conditions across sectors. JEL Classification: E31, E5, L11

Suggested Citation

  • Rudolf, Barbara & Seiler, Pascal, 2022. "Price setting before and during the pandemic: evidence from Swiss consumer prices," Working Paper Series 2748, European Central Bank.
    • Handle: RePEc:ecb:ecbwps:20222748
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    References listed on IDEAS

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    1. Chen, Haixia & Le, Vo Phuong Mai & Meenagh, David & Minford, Patrick, 2023. "UK Monetary Policy in An Estimated DSGE Model with State-Dependent Price and Wage Contracts," Cardiff Economics Working Papers E2023/22, Cardiff University, Cardiff Business School, Economics Section.
    2. Khalil, Makram & Lewis, Vivien, 2024. "Product turnover and endogenous price flexibility in uncertain times," Discussion Papers 14/2024, Deutsche Bundesbank.
    3. Alex Oktay, 2022. "Heterogeneity in the exchange rate pass-through to consumer prices: the Swiss franc appreciation of 2015," Swiss Journal of Economics and Statistics, Springer;Swiss Society of Economics and Statistics, vol. 158(1), pages 1-20, December.

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    More about this item

    Keywords

    consumer prices; COVID-19 pandemic; inflation; price-setting behavior; price rigidity;
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms

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