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Micro Foundations of Macroeconomic Price Adjustment: Survey Evidence from Swedish Firms

Author

Listed:
  • Apel, Mikael

    () (National Institute for Economic Research)

  • Friberg, Richard

    () (Department of Economics)

  • Hallsten, Kerstin

    () (Monetary Policy Department, Central Bank of Sweden)

Abstract

This paper reports the results from a survey on price-setting behavior of a large random sample of Swedish firms. Prices are found to adjust only infrequently; the median firm adjusts the price once a year. State-dependent pricing is found to be more common than is usually assumed and at least as important as time-dependent pricing. The paper sums up the evidence from this and two similar large-scale surveys on UK and US data. Notably, and suggesting directions for further research, four of the theories of price rigidity are ranked by the respondents among the top-five places in all three studies.

Suggested Citation

  • Apel, Mikael & Friberg, Richard & Hallsten, Kerstin, 2001. "Micro Foundations of Macroeconomic Price Adjustment: Survey Evidence from Swedish Firms," Working Paper Series 128, Sveriges Riksbank (Central Bank of Sweden).
  • Handle: RePEc:hhs:rbnkwp:0128
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    File URL: http://www.riksbank.se/upload/Dokument_riksbank/Kat_foa/wp_128.pdf
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    Keywords

    Nominal rigidity; Price-rigidity; Price-setting; Real rigidity; Time-dependent pricing; State-dependent pricing;

    JEL classification:

    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General
    • E30 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - General (includes Measurement and Data)
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms

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