Deflation and Relative Prices: Evidence from Japan and Hong Kong

Konferenzbeitrag

We test the menu cost model of Ball and Mankiw (1994, 1995) on data from the inflation and deflation periods in Japan and Hong Kong. We calculate the moments of the distribution of price changes using a random split procedure to overcome the bias noted by Cecchetti and Bryan (1999). The key implication of the model, that the parameter on skewness is positive during both inflation and deflation, is strongly supported. The data are less clear on, but does not reject, the hypothesis that the parameter on the standard deviation changes sign between inflation and deflation periods.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Beiträge zur Jahrestagung des Vereins für Socialpolitik 2011: Die Ordnung der Weltwirtschaft: Lektionen aus der Krise - Session: Money, Macro and Finance in East Asia ; No. A2-V3

Classification and Topics

• Classification: Wirtschaft ; Price Level; Inflation; Deflation ; Prices, Business Fluctuations, and Cycles: General (includes Measurement and Data) ; Business Fluctuations; Cycles
• Subject: inflation ; deflation ; menu costs ; Hong Kong ; Japan

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Gerlach, Stefan ; Kugler, Peter
• Event: Veröffentlichung
• (when): 2011

Further information

• Handle: http://hdl.handle.net/10419/48709
• Last update: 10.03.2025, 11:43 AM CET