Published Papers 2009
Paper 2009-III-3
"Price-Setting Behaviour in Switzerland: Evidence from CPI Micro Data"
Daniel Kaufmann
Abstract:This paper investigates the price setting behaviour of firms based on the individual price quotes underlying the Swiss consumer price index. The data set covers the years from 1993 to 2005. Six main findings emerge from the analysis. (i) Prices are sticky. (ii) The price setting behavior is heterogeneous across sectors and outlet characteristics. (iii) Price changes are sizeable. (iv) There is no indication of general downward price stickiness. (v) Firms respond to expected cost shocks at the date of their occurrence. (vi) There is some evidence that firms adjust their behaviour according to the state of the economy.
Pages: 293-349
JEL classification: E31, D40
Keywords: CPI data, price-setting, frequency of price changes, nominal price rigidity, time-dependent pricing, state-dependent pricing
Overview
