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What do thirteen million price records have to say about consumer price rigidity?

Author

Listed:
  • Laurent Baudry

    (Direction de la Recherche - Banque De France - Banque de France)

  • Hervé Le Bihan

    (Direction de la Recherche - Banque De France - Banque de France)

  • Patrick Sevestre

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

  • Sylvie Tarrieu

Abstract

Based on the analysis of 13 million price records underlying the computation of the French consumer price index, we provide a detailed assessment of consumer price rigidity. Our main results are as follows. The average duration of prices is around 8 months. Price durations and the patterns of price-setting strongly differ across sectors. Price cuts are almost as frequent as increases, suggesting no specific downward nominal rigidity. Price changes typically have large absolute sizes. Time variation in the frequency of price changes and in their size both contribute to inflation fluctuations. Overall there is evidence of both time- and state-dependent price-setting.

Suggested Citation

  • Laurent Baudry & Hervé Le Bihan & Patrick Sevestre & Sylvie Tarrieu, 2007. "What do thirteen million price records have to say about consumer price rigidity?," Post-Print halshs-00279976, HAL.
  • Handle: RePEc:hal:journl:halshs-00279976
    DOI: 10.1111/j.1468-0084.2007.00473.x
    Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00279976
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    References listed on IDEAS

    as
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