-in-place are reduced. We find that changes in SG&A costs separate between the two cost drivers, and that the explanatory power of … of the single-driver cost behavior model. Similar insights are obtained when we replace SG&A costs with employee … headcount or employee costs as the cost measure of interest. In all cases, we find that the cost inertia term is significantly …

, we are agnostic on the theory of sticky costs. Rather, we focus on empirical tests of cost stickiness. We show that past …-run asymmetric cost response to activity changes (i.e., sticky costs) as resulting from short-run managerial choices. In this paper … decisions on cost structure, which determine the magnitude of costs controllable in the short-term, induce non-stationarity in …

marginal costs, which should therefore be the driving force to observed inflation dynamics. This is not always the case in … underestimating the importance of (aggregate) marginal costs for (aggregate) inflation. We provide intuition for the direction of … looking pricing account for the observed persistence in aggregate inflation. Second, price-setting responds to movements in …