Discussion Paper Series in Economics, Department of Economics, Norwegian School of Economics (NHH)
Řivind A. Nilsen
Intermittent Price Changes in Production Plants: Empirical Evidence using Monthly Data
() and Magne Vange
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 lower in January, and a quadratic loss–function associated with the
distance from 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 current price is closed each month.
Keywords: Price Setting; Micro Data; Simulated Method of Moments; (follow links to similar papers)
JEL-Codes: E30; E31; E37; (follow links to similar papers)
41 pages, December 23, 2016
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