Konferenzbeitrag
On the importance of sectoral shocks for price-setting
We use a novel disaggregate sectoral euro area dataset with a regional breakdown that allows explicit estimation of the sectoral component of price changes (rather than interpreting the idiosyncratic component as sectoral as done in other papers). Employing a new method to extract factors from over-lapping data blocks, we find for our euro area data set that the sectoral component explains much less of the variation in sectoral regional inflation rates and exhibits much less volatility than previous findings for the US indicate. Country- and region-specific factors play an important role in addition to the sector-specific factors. We conclude that sectoral price changes have a "geographical" dimension, as yet unexplored in the literature, that might lead to new insights regarding the properties of sectoral price changes.
- Language
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Englisch
- Bibliographic citation
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Series: Beiträge zur Jahrestagung des Vereins für Socialpolitik 2010: Ökonomie der Familie - Session: International Price Dispersion ; No. A12-V1
- Classification
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Wirtschaft
Price Level; Inflation; Deflation
Money and Interest Rates: General
Multiple or Simultaneous Equation Models; Multiple Variables: General
- Subject
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disaggregated prices
euro area regional and sectoral inflation
common factor models
- Event
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Geistige Schöpfung
- (who)
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Beck, Günter W.
Hubrich, Kirstin
Marcellino, Massimiliano
- Event
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Veröffentlichung
- (who)
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Verein für Socialpolitik
- (where)
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Frankfurt a. M.
- (when)
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2010
- Handle
- Last update
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10.03.2025, 11:44 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
- Konferenzbeitrag
Associated
- Beck, Günter W.
- Hubrich, Kirstin
- Marcellino, Massimiliano
- Verein für Socialpolitik
Time of origin
- 2010
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