This paper reconciles the persistence of aggregate real exchange rates with the faster adjustment of international … stylized facts regarding this puzzle. First, adjustment to purchasing power parity deviations in aggregated data is not just a … slower version of adjustment to the law of one price in microeconomic data, as arbitrage occurs in different markets, in …

, empirical frequencies of micro price adjustment cannot replicate the time-series properties of the law-of-one-price deviations …. We extend their sticky price model by combining good specific price adjustment with information stickiness in the sense … cities within a country. Using a panel of U.S.-Canadian city pairs, we estimate a dynamic price adjustment process for each …

' currencies, nominal exchange rate flexibility cannot achieve any relative price adjustment. In that case nominal exchange rate …

method to identify commodity points. Price adjustment is treated as a nonlinear process, and a threshold autoregression (TAR …) offers a parsimonious specification within which both thresholds and adjustment speeds are estimated by maximum likelihood … methods. Our model performs well using post-1980 data reasonable: adjustment outside the thresholds might imply half-lives of …

by policy responses. This paper presents a theory-based measure of capital flow pressures, a new Exchange Market Pressure …

time, which we use in a difference-in-differences strategy. Firms' frequency of price adjustment did not change around the …