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A global assessment of the degree of price stickiness - results from the NBB Business survey

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  • Emmanuel Dhyne

Abstract

In this paper, we estimate the degree of price stickiness in Belgium using the NBB Business survey. Based on our estimates, 19.2% of prices are changed each month. The manufacturing sector and the trade sectors are characterized by a frequency of price changes close to 24.5%. The construction sector is characterized by a frequency of price changes close to 20.5% and B2B service sectors are characterized by a frequency of price changes of almost 9%. Econometric analyses of the determinants of the sectoral frequency of price changes indicate, on the one hand, that cost structure is the main explanatory variable of the sectoral discrepancies. On the other hand, we find that domestic competition does not seem to explain an excess or shortage of price changes at the sectoral level.

Suggested Citation

  • Emmanuel Dhyne, 2009. "A global assessment of the degree of price stickiness - results from the NBB Business survey," Brussels Economic Review, ULB -- Universite Libre de Bruxelles, vol. 52(1), pages 57-77.
    • Handle: RePEc:bxr:bxrceb:2013/80756
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    More about this item

    Keywords

    Price rigidity; Frequency of price changes; competition;
    All these keywords.

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General

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