Arbeitspapier
Prices and unit labor costs: A new test of price stickiness
This paper investigates the predictions of a simple optimizing model of nominal price rigidity for the dynamics of inflation. Taking as given the paths of nominal labor compensation and labor productivity to approximate the evolution of marginal costs, I determine the path of prices predicted by the solution of the firms' optimal pricing problem. Model parameters are chosen to maximize the fit with the data. I find evidence of a significant degree of price stickiness and substantial support for the forward-looking model of price setting. The results are robust to the use of alternative forecasting models for the path of unit labor costs, alternative measures of marginal costs, and alternative specifications of the model of price staggering.
- Language
-
Englisch
- Bibliographic citation
-
Series: Working Paper ; No. 2001-12
- Classification
-
Wirtschaft
Price Level; Inflation; Deflation
Business Fluctuations; Cycles
- Subject
-
Inflation
Phillips Curve
Unit Labor Cost
Preisrigidität
Inflation
Arbeitsproduktivität
Phillips-Kurve
Arbeitskosten
Theorie
- Event
-
Geistige Schöpfung
- (who)
-
Sbordone, Argia M.
- Event
-
Veröffentlichung
- (who)
-
Rutgers University, Department of Economics
- (where)
-
New Brunswick, NJ
- (when)
-
2001
- Handle
- Last update
-
10.03.2025, 11:43 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Sbordone, Argia M.
- Rutgers University, Department of Economics
Time of origin
- 2001
Other Objects (12)
Prices and Unit Labor Costs: A New Test of Price Stickiness
Capacity-Constrained Price Competition When Unit Costs Differ
Price Regulations in a Multi-unit Uniform Price Auction
Unit labor costs in the eurozone
Price competition and convex costs
Price instability in multi-unit auctions
Dynamic Price Competition with Price Adjustment Costs and Product Differentiation
Price indices on the basis of unit values: Unit value indices as proxies for price indices
Endogenous Costs and Price-Cost Margins
Endogenous Costs and Price-Cost Margins
Do Menu Costs Make Prices Sticky?
Costs, demand, and producer price changes
Prices and Unit Labor Costs: A New Test of Price Stickiness
Capacity-Constrained Price Competition When Unit Costs Differ
Price Regulations in a Multi-unit Uniform Price Auction
Unit labor costs in the eurozone
Price competition and convex costs
Price instability in multi-unit auctions
Dynamic Price Competition with Price Adjustment Costs and Product Differentiation
Price indices on the basis of unit values: Unit value indices as proxies for price indices
Endogenous Costs and Price-Cost Margins
Endogenous Costs and Price-Cost Margins
Do Menu Costs Make Prices Sticky?
Costs, demand, and producer price changes
Prices and Unit Labor Costs: A New Test of Price Stickiness
Capacity-Constrained Price Competition When Unit Costs Differ
Price Regulations in a Multi-unit Uniform Price Auction
Unit labor costs in the eurozone
Price competition and convex costs
Price instability in multi-unit auctions
Dynamic Price Competition with Price Adjustment Costs and Product Differentiation
Price indices on the basis of unit values: Unit value indices as proxies for price indices
Endogenous Costs and Price-Cost Margins
Endogenous Costs and Price-Cost Margins
Do Menu Costs Make Prices Sticky?