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Record: oai:ARNO:227681

AuthorsL. Alvarez, E. Dhyne, M.M. Hoeberichts, C. Kwapil, H. Le Bihan, P Lunnemann, F. Martins, R. Sabbatini, H. Stahl, P. Vermeulen, J. Vilmunen
TitleSticky prices in the euro area: a summary of new micro-evidence
JournalJournal of the European Economic Association
Volume4
Year2006
Issue2-3
Pages575-584
ISSN15424766
FacultyFaculty of Economics and Business
Institute/dept.FEB: Amsterdam School of Economics Research Institute (ASE-RI)
AbstractThis paper summarises the vast evidence on micro price-setting recently obtained for euro area countries. We consider studies with micro data on consumer and producer prices, as well as survey information. The main findings are: (1) prices in the euro area are sticky and stickier than in the US; (2) downward price rigidity is only slightly more marked than upward price rigidity; (3) heterogeneity and asymmetries are observed in price-setting; and (4) the relevance of theories that explain price stickiness, such as implicit or explicit contracts, marginal costs, and coordination failure, is confirmed, whereas menu costs, pricing thresholds, and costly information explanations are judged much less relevant by firms. (JEL: C25, D40, E31)
Document typeArticle
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