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 …

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 …

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 …

from 1910 to 1950. This coupled with previously published price information from the late twentieth century allows us to … present one of the first comprehensive views of nominal rigidities and retail price dispersion over the past 100 years. We … find that nominal rigidities have been conditioned upon prevailing rates of inflation with a greater frequency of price …

This paper presents evidence on the amount of price rigidity that exists in individual transaction prices. Using the … important findings are: 1.The degree of price rigidity in many industries is significant. It is not unusual in some industries … commodities, the correlation of price changes across buyers is very low. 3.There is no evidence that there is an asymmetry in …

second is driven by firms pricing to limit non-price competition within their market … a large empirical literature from the 1950's and 60's, that it is necessary to distinguish the response of price to an … two models that can potentially explain these findings. Both break the link between price and marginal cost, thereby …

We study the effect of menu costs on the pricing behavior of sellers and on the cross-sectional distribution of prices … small, the equilibrium is such that sellers follow a (Q,S,s) pricing rule. According to a (Q,S,s) rule, a seller lets … inflation erode the real value of its nominal price until it reaches some point s. Then, the seller pays the menu cost and …