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Please use this identifier to cite or link to this item:
http://hdl.handle.net/10419/25514
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| Title: | | Menu costs, multi-product firms, and aggregate fluctuations  |
| Authors: | | Midrigan, Virgiliu |
| Issue Date: | | 2006 |
| Series/Report no.: | | CFS Working Paper 2007/13 |
| Abstract: | | I employ a large set of scanner price data collected in retail stores to document that (i) although the average magnitude of price changes is large, a substantial number of price changes are small in absolute value; (ii) the distribution of non-zero price changes has fat tails; and (iii) stores tend to adjust prices of goods in narrow product categories simultaneously. I extend the standard menu costs model to a multi-product setting in which firms face economies of scale in the technology of adjusting prices. The model, because of its ability to replicate this additional set of micro-economic facts, can generate aggregate fluctuations much larger than those in standard menu costs economies. |
| Subjects: | | State-Dependent Pricing Multi-Products Firms |
| JEL: | | E31 E32 |
| Document Type: | | Working Paper |
| Appears in Collections: | | CFS Working Paper Series, Universität Frankfurt a. M.
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