Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/259324 
Year of Publication: 
2002
Series/Report no.: 
Working Paper No. 2002-09
Publisher: 
Bar-Ilan University, Department of Economics, Ramat-Gan
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: 
price rigidity
cost shock
shock persistence
market information
JEL: 
E12
E31
L16
Document Type: 
Working Paper

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