scholarly journals Shocks vs Menu Costs: Patterns of Price Rigidity in an Estimated Multi-Sector Menu-Cost Model

2018 ◽  
Author(s):  
Erwan Gautier ◽  
Herve Le Bihan
Keyword(s):  
Cost Model ◽  
Price Rigidity ◽  
Menu Costs ◽  
Menu Cost

scholarly journals Shocks vs Menu Costs: Patterns of Price Rigidity in an Estimated Multi-Sector Menu-Cost Model

2020 ◽  
pp. 1-45
Author(s):  
Erwan Gautier ◽  
Hervé Le Bihan
Keyword(s):  
Monetary Policy ◽  
Cost Model ◽  
Structural Parameters ◽  
Price Rigidity ◽  
Time Varying ◽  
Menu Costs ◽  
Sector Model ◽  
Menu Cost ◽  
Monetary Shock ◽  
Substantial Degree

Sectoral heterogeneity matters for monetary policy. Using CPI microdata, we estimate for 227 products a time–varying menu-cost model to investigate the quantitative relevance of this heterogeneity. We find a substantial degree of cross-sectoral heterogeneity in all structural parameters. Heterogeneity in the Calvo component of the pricing friction is however the main source of heterogeneity in price rigidity. Cross-sectoral heterogeneity amplifies the output effect of a monetary shock by a factor of about 2.5, compared to a single-sector model estimated with mean moments. Heterogeneity in the Calvo parameter plays a key role in this amplification.

Menu costs, firm size and price rigidity

2000 ◽  
Vol 66 (1) ◽  
pp. 59-63 ◽  
Author(s):  
Robert A Buckle ◽  
John A Carlson
Keyword(s):  
Firm Size ◽  
Price Rigidity ◽  
Menu Costs

scholarly journals Welfare Costs of Inflation in a Menu Cost Model

2008 ◽  
Vol 98 (2) ◽  
pp. 438-443 ◽  
Author(s):  
Ariel Burstein ◽  
Christian Hellwig
Keyword(s):  
Cost Model ◽  
Welfare Costs ◽  
Menu Cost

Asymmetric effects of aggregate demand: An empirical test of a menu-cost model

2000 ◽  
Vol 22 (1) ◽  
pp. 29-51 ◽  
Author(s):  
David Demery ◽  
Nigel W. Duck
Keyword(s):  
Empirical Test ◽  
Cost Model ◽  
Aggregate Demand ◽  
Asymmetric Effects ◽  
Menu Cost

scholarly journals Prices and Market Shares in a Menu Cost Model

2007 ◽  
Author(s):  
Ariel Burstein ◽  
Christian Hellwig
Keyword(s):  
Cost Model ◽  
Market Shares ◽  
Menu Cost

scholarly journals The Roles of Price Points and Menu Costs in Price Rigidity

2019 ◽  
Author(s):  
Edward S. Knotek
Keyword(s):  
Price Rigidity ◽  
Menu Costs

A Cold-Turkey versus a Gradualist Approach in a Menu Cost Model

2002 ◽  
Vol 2 (1) ◽  
Author(s):  
Sanguck Loh
Keyword(s):  
Cost Model ◽  
Menu Cost ◽  
Cold Turkey

scholarly journals The Effect of Sales and Evidence from Micro Data

2017 ◽  
Vol 8 (1) ◽  
pp. 37 ◽  
Author(s):  
Zi-Yi Guo ◽  
Yangxiaoteng Luo
Keyword(s):  
Cost Model ◽  
Micro Data ◽  
Retail Sales ◽  
Product Level ◽  
Price Increases ◽  
Level Data ◽  
Menu Cost ◽  
Micro Level

The concept of menu cost indicates that firms are facing a fixed menu cost when they want to change the nominal prices. However, the standard menu cost model is hardly to explain the observed facts from micro-level data, especially in terms of sales. In this paper, we investigate the effect of sales through a novel product-level dataset. There are at least three findings from our estimation results. First, we find that retail sales themselves, rather than price decreases, have a large effect on consumers’ purchases. Second, consumers are more prices sensitive when the product is on sale than they are when the product is not on sale. Third, consumers are far more aware of price decreases than price increases.

Asymmetric price adjustment in a menu-cost model

1998 ◽  
Vol 68 (3) ◽  
pp. 295-309 ◽  
Author(s):  
Jakob B. Madsen ◽  
Bill Z. Yang
Keyword(s):  
Cost Model ◽  
Price Adjustment ◽  
Menu Cost
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