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Yesterday's Bad Times Are Today's Good Old Times: Retail Price Changes Are More Frequent Today Than in the 1890s

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  • ALAN KACKMEISTER

Abstract

This paper documents differences in the nominal rigidity of retail prices across two 28‐month periods: 1889–91 and 1997–99. The most striking finding is that prices changed much less frequently in 1889–91. In the late‐1800s when price changes did occur they were smaller on average and more narrowly distributed with fewer small or large price changes. Further, price changes were more permanent 100‐plus years ago. These differences are consistent with a high occurrence of temporary price shocks and a higher cost of changing prices in 1889–91 than in 1997–99.

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  • Alan Kackmeister, 2007. "Yesterday's Bad Times Are Today's Good Old Times: Retail Price Changes Are More Frequent Today Than in the 1890s," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 39(8), pages 1987-2020, December.
    • Handle: RePEc:wly:jmoncb:v:39:y:2007:i:8:p:1987-2020
    DOI: 10.1111/j.1538-4616.2007.00095.x
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