We present a state-dependent pricing model that generates inflation fluctuations from idiosyncratic shocks to the cost of price changes of individual firms. A firm's nominal price increase, lowers other firms' relative prices, thereby inducing further nominal price increases. This snow-ball...

In this Supplementary Appendix, we extend the baseline model of "Repricing Avalanches" to the case where productivity is not constant. Even though some portions are straightforward extension of the baseline model, we allow for some overlap with the main text for the sake of a self-contained...

Nirei and Scheinkman (2021) proposed an equilibrium model of price adjustments with menu-costs with a finite number of firms and derived a "reproduction number" for repricing and a limit functional form for the distribution of the number of simultaneously price-adjusting firms. We show that the...

We present a menu-cost pricing model with a large but finite number n of firms. A firm’s nominal price increase lowers other firms’ relative prices, thereby inducing further nominal price increases. The distribution of these repricing avalanches converges as n→∞ to a mixture of...