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Time-Dependent or State-Dependent Pricing? Evidence From a Large Devaluation

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  • Guimaraes, Bernardo
  • Feltrin Jr, Celio

Abstract

State-dependent and time-dependent price setting models yield distinct implications for how frequency and magnitude of price changes react to shocks. This note studies pricing behavior in Brazil following the large devaluation of the Brazilian Real in 1999 to distinguish between models. The results are consistent with state-dependent pricing.

Suggested Citation

  • Guimaraes, Bernardo & Feltrin Jr, Celio, 2016. "Time-Dependent or State-Dependent Pricing? Evidence From a Large Devaluation," Brazilian Review of Econometrics, Sociedade Brasileira de Econometria - SBE, vol. 36(2), November.
    • Handle: RePEc:sbe:breart:v:36:y:2016:i:2:a:56757
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    References listed on IDEAS

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    Cited by:

    1. Prince, Diogo de, 2018. "Are price hazard functions really decreasing functions in Brazil?," Journal of Macroeconomics, Elsevier, vol. 57(C), pages 266-276.

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