Menu Costs and Inflation Asymmetries Some Micro Data Evidence

Arbeitspapier

The paper explains the observed asymmetric inflation response to value-added tax (VAT) changes in Hungary by calibrating a standard sectoral menu cost model on a new micro-level CPI data set. The model is able to reproduce important moments of the data, and finds that the asymmetry can be explained by the interaction of menu costs, (sectoral) trend inflation and forward-looking firms, thereby it provides direct evidence to the argument of Ball and Mankiw (1994).

Object Details

• ISBN: 978-963-9796-03-4
• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IEHAS Discussion Papers ; No. MT-DP - 2007/6

Classification and Topics

• Classification: Wirtschaft ; Prices, Business Fluctuations, and Cycles: General (includes Measurement and Data)
• Subject: Menu Cost ; Inflation Asymmetry ; Sectoral Heterogeneity ; Value-Added Tax ; Anpassungskosten ; Schock ; Inflation ; Preismanagement ; Preisrigidität ; Umsatzsteuer ; Theorie ; Schätzung ; Ungarn

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Karádi, Péter ; Reiff, Àdám
• Event: Veröffentlichung
• (who): Hungarian Academy of Sciences, Institute of Economics
• (where): Budapest
• (when): 2007

Further information

• Handle: http://hdl.handle.net/10419/108115
• Last update: 10.03.2025, 11:41 AM CET