In the data, a sizable fraction of price changes are temporary price reductions referred to as sales. Existing models … include no role for sales. Hence, when confronted with data in which a large fraction of price changes are sales related, the … models must either exclude sales from the data or leave them in and implicitly treat sales like any other price change. When …

degrees of price stickiness then relatively more sticky goods tend to have relatively more persistent and volatile good … theory for persistence have some modest support: in the data, the stickier is the price of a good the more persistent is its … theory for volatiity fare less well: in the data, the stickier is the price of a good the smaller is its conditional variance …