Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/206846
Authors: 
Chen, Haipeng (Allan)
Levy, Daniel
Ray, Sourav
Bergen, Mark
Year of Publication: 
2008
Citation: 
[Journal:] Journal of Monetary Economics [ISSN:] 0304-3932 [Volume:] 55 [Issue:] 4 [Pages:] 728-737
Abstract: 
Analyses of a large retail scanner price data set reveal a new and surprising regularity – small price increases occur more frequently than small price decreases for price changes of up to 10¢. That is, we find asymmetric price adjustment “in the small.” Furthermore, it turns out that inflation offers only a partial explanation for the finding. Indeed, substantial proportion of the asymmetry remains unexplained, even after accounting for the inflation. For example, the asymmetry holds also after excluding periods of inflation from the data, and even for products whose price had not increased. The findings hold for different aggregate and disaggregate measures of inflation and also after allowing for lagged price adjustments.
Subjects: 
Asymmetric Price Adjustment
Price Rigidity
Inflation
Rational Inattention
Monetary Policy
JEL: 
E31
D11
D21
D80
L11
L16
M31
Published Version’s DOI: 
Document Type: 
Article
Document Version: 
Accepted Manuscript (Postprint)

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