Inflation and Price Adjustments: Evidence from Norwegian Consumer Price Data 1975-2004

Wulfsberg, Fredrik

doi:10.2139/ssrn.1716744

Cited by 19 publications

(24 citation statements)

References 20 publications

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“… Gagnon (2009). on Mexican data during the peso devaluation orWulfsberg (2010) on Norwegian data during the 70s provide evidence on price-setting features in unstable economic environments.…”

mentioning

confidence: 98%

More Facts About Prices: France before and during the Great Recession

2013

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mentioning

confidence: 98%

More Facts About Prices: France before and during the Great Recession

2013

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“…Gagnon (2009) reports that the average absolute size of price adjustments was little impacted by the burst in infl ation that accompanied the Mexican peso crisis. Similarly, Wulfsberg (2009) uncovers no apparent change in the absolute size of price adjustments in Norway as trend infl ation fell from around 10 percent in the mid-1970s to 2 percent in the mid-1990s. Both studies note a rise in the average absolute size since the late 1990s, but it is diffi cult to attribute this rise to changing aggregate conditions.…”

Section: Endnotesmentioning

confidence: 97%

Individual Price Adjustment along the Extensive Margin

Gagnon¹,

López‐Salido²,

Vincent³

2012

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Firms employ a rich variety of pricing strategies whose implications for aggregate price dynamics often diverge. This situation poses a challenge for macroeconomists interested in bridging micro and macro price stickiness. In responding to this challenge, we note that differences in macro price stickiness across pricing mechanisms can often be traced back to price changes that are either triggered or cancelled by shocks. We exploit observed micro price behavior to quantify the importance of this margin of adjustment for the response of inflation to shocks. Across a range of empirical exercises, we find strong evidence that changes in the timing of price adjustments contribute significantly to the flexibility of the aggregate price level.

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“…For instance, when n = 10, the level of the hazard rate evaluated at the expected duration is about twice the hazard for n = 2. This is a prediction that can be tested in the cross section using the data set in Bhattarai and Schoenle (2011) or Wulfsberg (2010).…”

Section: Implications For Frequency and Size Of Price Changesmentioning

confidence: 99%

Price Setting With Menu Cost for Multiproduct Firms

2014

Econometrica

100

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We model the decisions of a multiproduct firm that faces a fixed “menu” cost: once it is paid, the firm can adjust the price of all its products. We characterize analytically the steady state firm's decisions in terms of the structural parameters: the variability of the flexible prices, the curvature of the profit function, the size of the menu cost, and the number of products sold. We provide expressions for the steady state frequency of adjustment, the hazard rate of price adjustments, and the size distribution of price changes, all in terms of the structural parameters. We study analytically the impulse response of aggregate prices and output to a monetary shock. The size of the output response and its duration both increase with the number of products; they more than double as the number of products goes from 1 to 10, quickly converging to the response of Taylor's staggered price model.

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Inflation and Price Adjustments: Evidence from Norwegian Consumer Price Data 1975-2004

Cited by 19 publications

References 20 publications

More Facts About Prices: France before and during the Great Recession

More Facts About Prices: France before and during the Great Recession

Individual Price Adjustment along the Extensive Margin

Price Setting With Menu Cost for Multiproduct Firms

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