The Behavior of Prices and Inflation: An Empirical Analysis of Disaggregat Price Data

Identifying Inflations Grease and Sand Effects in the Labor Market

“…This assumption is consistent with the observed tendency of inflation to raise forecast and actual goods price-change dispersion (Ball andCecchetti, 1990 andLach andTsiddon, 1992, respectively). Indeed, it is implausible that firms' wage-change forecasts would be more accurate than their other price-change forecasts, since there would be strong incentives and little cost to sharing such information within the firm.…”

“…The sand literature for product markets finds consistent evidence of inflation induced price-change variation (for the closest example see Lach and Tsiddon, 1992). If inflation has no similar effect on wages, information must be better in labor markets, or menu costs or other sources of rigidity must be lower.…”

Aggregate and Regional Disaggregate Fluctuations

“…In the most regular case, when M implies a unique ergodic distribution, the sequence M k : k 1 converges to that distinguished matrix having all rows equal to the ergodic distribution. 15 Convergence occurs at a geometric rate, given by p o w ers of (Jordan blocks in) the eigenvalues j . Thus the smaller is the modulus of an eigenvalue|the larger is 1 j j j |the faster does the corresponding component in M k converge.…”

“…Interactions between individual income distributions and macroeconomic dynamics (e.g., Galor and Zeira [12] and Persson and Tabellini [19]), between relative prices and aggregate in ation (e.g., Lach and Tsiddon [15]), and between sectoral imbalance and aggregate unemployment (e.g., Evans [11] and Lilien [16]) are instances where disaggregate analysis has contributed insights for understanding macroeconomic uctuations. In the same vein are the ideas that cross-sectional spillovers can cumulate for aggregate growth and uctuations (e.g., Durlauf [8] and Long and Plosser [18]) and that gross labor ows|rather than just net ones|are informative for macroeconomic business cycles (e.g., Davis and Haltiwanger [7]).…”

Price synchronization in retailing: some empirical evidence

“…Other models in the same vein pinpoint rigidities associated to price adjustment costs (menu costs). Lach and Tsiddon (1992) undertake an empirical application to investigate the effect of inflation on price dispersion and the evidence seems coherent with menu cost arguments. The study considers disaggregated data on prices of foodstuffs in Israel during 1978-84, and obtains evidence that price changes are not synchronized even under episodes of high inflation, indicating that staggering is a relevant phenomenon.…”