Intermittent Price Changes in Production Plants: Empirical Evidence using Monthly Data

31 August 2018 13:35

Intermittent Price Changes in Production Plants: Empirical Evidence using Monthly Data

Øivind Anti Nilsen and Magne Vange have published paper in Oxford Bulletin of Economics and Statistics: "Intermittent Price Changes in Production Plants: Empirical Evidence using Monthly Data"

Abstract:

The price‐setting behaviour of manufacturing plants is examined using a large panel of monthly surveyed plant‐ and product‐specific prices. The sample shows a high frequency of zero changes, relatively small price changes and a strong seasonal price‐change pattern. The intermittent feature of price changes is modelled with thresholds which are smaller in January, and a quadratic loss function associated with the distance from the target price. The findings show statistically significant pricing thresholds, which are only two‐thirds in January, and partial adjustment parameters implying that 60% of the deviation between the target price and the current price is closed each month.

READ THE ARTICLE IN "Oxford bulletin of economics and statistics"