Using CPI micro data for 11 euro area countries covering about 60% of the euro area consumption basket over the period 2010-2019, we document new findings on consumer price rigidity in the euro area: (i) each month on average 12.3% of prices change, which compares with 19.3% in the United...

This paper contrasts empirically four leading models of inflation dynamics - the accelerationist Phillips curve (APC), the new Keynesian Phillips curve (NKPC), the hybrid Phillips curve (HPC), and the sticky information Phillips curve (SIPC). We employ an encompassing Phillips curve...

This paper contrasts empirically four leading models of inflation dynamics - the accelerationist Phillips curve (APC), new Keynesian Phillips curve (NKPC), hybrid Phillips curve (HPC) and sticky information Phillips curve (SIPC). We employ an encompassing Phillips curve specification that allows...

In this article, we study how the economic environment for firms in the service sector affects their price adjustments by using a novel dataset from the Services Survey of the Brazilian Institute of Economics from the Getulio Vargas Foundation (FGV). The set of variables from the survey includes...

We present a sticky-price model incorporating heterogeneous firms and systematic firm-level productivity trends. Aggregating the model in closed form, we show that it delivers radically different predictions for the optimal inflation rate than canonical sticky price models featuring homogenous...

The failure to predict the surge in inflation in 2021 raises questions about whether we are better equipped to anticipate a future decline in inflation. What tools do we intend to use for predicting the trajectory of inflation? Are we still primarily relying on survey data regarding inflation...

Price setting has become more flexible following a string of large adverse shocks (Covid-19, the Ukraine War). We argue that a shift to a high-uncertainty regime incentivizes firms to invest in their ability to adjust prices. We formalize this idea in a general equilibrium model with endogenous...

We empirically identify the effect of inflation on relative price distortions, using a novel identification approach derived from sticky price theories with time or state-dependent adjustment frictions. Our approach can be directly applied to micro price data, does not rely on estimating the gap...

As illicit substances move into the legal product space, substitution patterns with legal products become more salient. In particular, marijuana legalization may have implications for the use of other legal “sin” goods. We estimate a structural model of multi-product use of illegal and legal...

Digitale Technologien begünstigen den Einsatz einer dynamischen Preisgestaltung, also von Preisen, die für ein prinzipiell gleiches Produkt unangekündigt variieren. Dabei werden in der öffentlichen Diskussion unterschiedliche Ausgestaltungsformen dynamischer Preise oftmals vermischt, was...