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Title:What Do Micro Price Data Tell Us on the Validity of the New Keynesian Phillips Curve? PDF Logo
Authors:Alvarez González, Luis Julián
Issue Date:2008
Citation:[Journal:] Economics: The Open-Access, Open-Assessment E-Journal [Volume:] 2 [Issue:] 2008-19 [Pages:] 1-36 [DOI/URN:] doi:10.5018/economics-ejournal.ja.2008-19
Abstract:This paper surveys the current state of global empirical research on price setting behaviour at the firm level to evaluate the adequacy of pricing models used in the macro literature. To that end, it analyses the implications of 25 theoretical models (sticky information, menu costs, time dependent, costs of adjustment and customer anger models) in terms of their ability to match the key micro stylised facts. It is found that the explanatory power differs considerably across models and that many popular models are at odds with the main micro features, suggesting the need to further refine modelling strategies.
Subjects:Pricing models
micro data
Phillips Curve
hazard rate
time dependent
menu costs
sticky information
JEL:E31
D40
Persistent Identifier of the first edition:doi:10.5018/economics-ejournal.ja.2008-19
Creative Commons License:http://creativecommons.org/licenses/by-nc/2.0/de/deed.en
Document Type:Article
Appears in Collections:Economics: The Open-Access, Open-Assessment E-Journal - Journal Articles

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