firms to adjust their prices. We develop a menu-cost model of pricing in which retail firms intermediate trade between … goods and services in the consumption basket. For example, the price of gasoline at the retail pump is predicted to adjust … more frequently and by more than the price of a haircut due to the high volatility in wholesale gasoline prices relative to …

consumers have become less price sensitive over time …

Chile as a quasi-natural experiment, we show that the pricing behavior of supermarkets is consistent with a pure … anticipation effect: during the 31-day period following the start of the Riots, supermarkets reduce the frequency of price changes … and, conditional on a price change, the absolute magnitude of price changes increase. A quantitative menu cost model with …

The menu-cost interpretation of sticky prices implies that the probability of a price change should depend on the past … history of prices and fundamentals only through the gap between the current price and the frictionless price. We find that … menu-cost model as a literal description of these firms' behavior, arguing instead that price stickiness arises from …

Pricing complementarities play a key role in determining the propagation of monetary disturbances in sticky price … models. We propose a procedure to infer the degree of firm-level pricing complementarities in the context of a menu cost … model of price adjustment using data on prices and market shares at the level of individual varieties. We then apply this …

We propose a simple framework to assess the costs of nominal price adjustment using stock market returns. We document … array of checks. These results suggest that menu costs---broadly defined to include physical costs of price adjustment …, informational frictions, etc.---are an important factor for nominal price rigidity. We also show that our empirical results …

consumer surplus bounds. In scanner data we find smaller panel elasticities than cross-section and that soda price increases …

the price elasticity of demand for each observation and report the average price elasticity across all observations or … report the price elasticity of demand at the mean of the price variable. Policy makers rely on these average price elasticity … estimates for public health and revenue generation purposes. The use of an average price elasticity may yield misleading …

How can price elasticities be identified when agents face optimization frictions such as adjustment costs or … inattention? I derive bounds on structural price elasticities that are a function of the observed effect of a price change on … demand, the size of the price change, and the degree of frictions. The degree of frictions is measured by the utility losses …

. Despite its simplicity, the calibrated model delivers untargeted pricing dynamics and a markup distribution that are … alternative menu cost models that explicitly target pricing dynamics. The key in reconciling firm and pricing dynamics comes from … effortlessly unifies pricing, markup, and firm dynamics …