Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/206823
Authors: 
Levy, Daniel
Dutta, Shantanu
Bergen, Mark
Year of Publication: 
2002
Citation: 
[Journal:] Journal of Money, Credit and Banking [ISSN:] 1538-4616 [Volume:] 34 [Issue:] 1 [Pages:] 197-220
Abstract: 
We combine two data sets to study price rigidity. The first consists of weekly time series of retail, wholesale, and spot prices for twelve products. These time series contain two exogenous cost shocks. We find that prices exhibit more rigidity in response to the second shock than the first. The second data set consists of all publicly available information about the shocks. Content analysis of these information reveals that the first shock is larger and more persistent, and the market has more information on it than the second. We conclude, therefore, that prices are more flexible in response to cost shocks that are larger, that are more persistent, and on which market participants have more information.
Subjects: 
Menu Cost
Cost of Price Adjustment
Price Rigidity
Variation in Price Rigidity
Rigid Prices
Sticky Prices
Exogenous Shocks
Temporary Shocks
Permanent Shocks
Weather Shocks
News
Information Shocks
Content Analysis
Shock Persistence
JEL: 
E12
E31
L16
URL of the first edition: 
Document Type: 
Article
Document Version: 
Accepted Manuscript (Postprint)

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