Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/154435
Authors: 
Porqueddu, Mario
Fabiani, Silvia
Year of Publication: 
2017
Series/Report no.: 
ECB Working Paper No. 2002
Abstract: 
This paper examines the process of adjustment of prices in Italy to determine whether nominal flexibility, measured by the frequency of price changes, has increased in the recent years of protracted stagnation and double-dip recession. The analysis is based on a large micro-level dataset of individual prices collected monthly by Istat from 2006 to 2013 for the Consumer Price Index. We find that both the percentage of prices adjusted monthly and the average size of the adjustment have risen significantly since the 1996-2001 period, in particular for downward changes. This greater flexibility is related in part to the spread of modern distribution structures. Our estimates further indicate that the recession has affected the price adjustment mechanism: for manufactures, price cuts have become larger and more frequent, while increases are more moderate; for services, both the frequency and the size of price increases have diminished.
Subjects: 
consumer prices
frequency of price adjustment
nominal flexibility
JEL: 
E31
D21
D40
L11
Persistent Identifier of the first edition: 
ISBN: 
978-92-899-2724-6
Document Type: 
Working Paper

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