publication . Report . Article . Preprint . 2013

Price Rigidity: Microeconomic Evidence and Macroeconomic Implications

Emi Nakamura; Jón Steinsson;
Open Access
  • Published: 02 Aug 2013
  • Publisher: National Bureau of Economic Research
Abstract
We review recent evidence on price rigidity from the macroeconomics literature and discuss how this evidence is used to inform macroeconomic modeling. Sluggish price adjustment is a leading explanation for the large effects of demand shocks on output and, in particular, the effects of monetary policy on output. A recent influx of data on individual prices has greatly deepened macroeconomists’ understanding of individual price dynamics. However, the analysis of these new data raises a host of new empirical issues that have not traditionally been confronted by parsimonious macroeconomic models of price setting. Simple statistics such as the frequency of price chan...
Subjects
free text keywords: temporary sales, monetary non-neutrality, jel:E30
Related Organizations
Funded by
NSF| Price Adjustment, Exchange Rate Policy and Monetary Models
Project
  • Funder: National Science Foundation (NSF)
  • Project Code: 0922011
  • Funding stream: Directorate for Social, Behavioral & Economic Sciences | Division of Social and Economic Sciences
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