It is well known that business cycles in OECD countries exhibit a remarkable degree of synchronization. Much less known is that the peak of the OECD cycle is associated with high prices of labor-intensive products and low prices of capital-intensive ones. We document this cyclical behavior of...

We examine the link between inflation and the variability of relative prices in U.S. equity markets and in U.S. goods and services markets. We find strong, comparable links in both sets of markets. This finding represents a puzzle since conventional wisdom ? derived from menu cost or imperfect...

This paper uncovers a striking empirical regularity: the consumer price of a good relative to a different good within a country tends to be much less variable than the price of that good relative to a similar good in another country. This fact seems to hold for all goods except very simple,...