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How frequently do consumer prices change in transition countries?

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  • Jacek Wallusch

Abstract

A common feature of recent literature regarding inflation dynamics is the Calvo pricing mechanism. Using this model and aggregate series, I estimate the price change probability and the mean time between price changes in 13 transition countries. The average price change probability is much larger than suggested by the New Keynesian Phillips Curve (NKPC) literature. The corresponding mean time between price changes is slightly longer than 6 months. Moreover, a forward-looking pricing has been found only for four countries.

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  • Jacek Wallusch, 2012. "How frequently do consumer prices change in transition countries?," Applied Economics Letters, Taylor & Francis Journals, vol. 19(10), pages 921-928, July.
    • Handle: RePEc:taf:apeclt:v:19:y:2012:i:10:p:921-928
    DOI: 10.1080/13504851.2011.608631
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