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"Price setting in the euro area: Some stylized facts from individual producer price data." NBB Working Paper No. 111, March 2007

Vermeulen, Philip, and Dias, Daniel, and Dossche, Maarten, and Gautier, Erwan, and Hernando, Ignacio, and Sabbatini, Roberto, and Stahl, Harald. (2007) "Price setting in the euro area: Some stylized facts from individual producer price data." NBB Working Paper No. 111, March 2007. [Working Paper]

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    Abstract

    This paper documents producer price setting in 6 countries of the euro area: Germany, France, Italy, Spain, Belgium and Portugal. It collects evidence from available studies on each of those countries and also provides new evidence. These studies use monthly producer price data. The following five stylised facts emerge consistently across countries. First, producer prices change infrequently: each month around 21% of prices change. Second, there is substantial cross-sector heterogeneity in the frequency of price changes: prices change very often in the energy sector, less often in food and intermediate goods and least often in non-durable non- food and durable goods. Third, countries have a similar ranking of industries in terms of frequency of price changes. Fourth, there is no evidence of downward nominal rigidity: price changes are for about 45% decreases and 55% increases. Fifth, price changes are sizeable compared to the inflation rate. The paper also examines the factors driving producer price changes. It finds that costs structure, competition, seasonality, inflation and attractive pricing all play a role in driving producer price changes. In addition producer prices tend to be more flexible than consumer prices.

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    Item Type: Working Paper
    Uncontrolled Keywords: Price-setting; producer prices.
    Subjects for non-EU documents: Countries > Portugal
    Countries > Belgium
    Countries > Italy
    Countries > France
    Countries > Spain
    Countries > Germany
    EU policies and themes > Policies & related activities > economic and financial affairs > business/private economic activity
    Subjects for EU documents: UNSPECIFIED
    EU Series: UNSPECIFIED
    ["eprint_fieldname_eusries" not defined]: UNSPECIFIED
    EU Annual Reports: UNSPECIFIED
    Series: Series > National Bank of Belgium (Brussels) > Working Papers
    Depositing User: Phil Wilkin
    Official EU Document: No
    Language: English
    Date Deposited: 22 Mar 2008
    Page Range: p. 46
    Last Modified: 15 Feb 2011 17:49
    URI: http://aei.pitt.edu/id/eprint/7610

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