A central motivating factor for studying price markups is their effect on consumer welfare. Reported estimates of (firm-level) price markups in the literature, however, are often focused on industry or cross-country comparisons. These treat different industries equally rather than based on how...

I examine a rational expectations model of buyers and capacity con-strained sellers, where traders can choose between a cluster and a searchmarket. Sellers choose a market and post a price, and then buyerschoose which market to visit. There is a pure strategy equilibriumwhere all agents are in...

Pay What You Want (PWYW) and Name Your Own Price (NYOP) are customer driven pricing mechanisms that give customers (some) pricing power. Both have been used in service industries with high fixed costs to price discriminate without setting a reference price. Their participatory and innovative...

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...

The uncertainty of U.S. core inflation, measured by the stochastic volatility of forecast errors, has soared to a level not seen in nearly five decades since the COVID-19 pandemic hit the global economy. Prices, consumption, and production increase after a positive shock to core inflation...

The literature on wage bargaining so far mainly argues that unemployment benefits are relevant outside options for employees. This paper demonstrates that also a change in outside wage options drives wages in continuing jobs. The authors use the natural experiment of a crafts reform that reduces...

This paper suggests a quantifiable multi-sector-multi-country economic model of goods and services production and consumption. It calibrates overall (variable and fixed) costs to market-specific sales by sector and decomposes these costs into observable and unobservable components. In an...

Recent monetary search models emphasize that the real effects of inflation via its impact on price dispersion depend on the level of search costs and, thus, on the level of market integration. For less integrated markets, the inflation-price dispersion nexus is predicted to be asymmetrically...

We introduce a dynamic panel threshold model to shed new light on the impact of inflation on long-term economic growth. The empirical analysis is based on a large panel-data set including 124 countries during the period from 1950 to 2004. For industrialized countries, our results confirm the...

We assess the effects of financial shocks on inflation, and to what extent financial shocks can account for the "missing disinflation" during the Great Recession. We apply a vector autoregressive model to US data and identify financial shocks through sign restrictions. Our main finding is that...