Selection effects in producer-price setting

Arbeitspapier

We use micro data on product prices linked to information on the firms that set them to test for selection effects (state dependence) in micro-level producer pricing. In contrast to using synthetic data from a canonical Menu-Cost model, we find very weak, if any, micro-level selection effects when running price change probability regressions on actual data. Also, fitting a model that nests both time- and state-dependent elements (the CalvoPlus model of Nakamura and Steinsson, 2010), the parameters mimic the standard Calvo (1983) model. Thus, upstream in the supply chain, price setting is best characterized by a very low degree of self-selection.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Sveriges Riksbank Working Paper Series ; No. 290

Classification and Topics

• Classification: Wirtschaft ; Industrial Organization and Macroeconomics: Industrial Structure and Structural Change; Industrial Price Indices
• Subject: Price-setting ; Business Cycles ; Micro Data

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Carlsson, Mikael
• Event: Veröffentlichung
• (who): Sveriges Riksbank
• (where): Stockholm
• (when): 2014

Further information

• Handle: http://hdl.handle.net/10419/129710
• Last update: 10.03.2025, 11:42 AM CET