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Microeconomic Price Adjustments and Inflation: Evidence from Spanish Sectoral Data

Author

Listed:
  • Ángel Estrada
  • Ignacio Hernando

Abstract

The purpose of this paper is to illustrate the implications for aggregate price dynamics of alternative characterizations of microeconomic price adjustment policies. Within the hazard adjustment framework developed in Caballero and Engel (1993a), we present alternative models of individual price adjustment that are consistent with the predictions of the menu-cost models.

Suggested Citation

  • Ángel Estrada & Ignacio Hernando, 1999. "Microeconomic Price Adjustments and Inflation: Evidence from Spanish Sectoral Data," Working Papers 9921, Banco de España.
    • Handle: RePEc:bde:wpaper:9921
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    File URL: https://www.bde.es/f/webbde/SES/Secciones/Publicaciones/PublicacionesSeriadas/DocumentosTrabajo/99/Fic/dt9921e.pdf
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    References listed on IDEAS

    as
    1. Caballero, Ricardo J. & Engel, Eduardo M. R. A., 1993. "Microeconomic rigidities and aggregate price dynamics," European Economic Review, Elsevier, vol. 37(4), pages 697-711, May.
    2. Robert Amano & Tiff Macklem, 1997. "Menu Costs, Relative Prices, and Inflation: Evidence for Canada," Staff Working Papers 97-14, Bank of Canada.
    3. Julio J. Rotemberg & Michael Woodford, 1991. "Markups and the Business Cycle," NBER Chapters, in: NBER Macroeconomics Annual 1991, Volume 6, pages 63-140, National Bureau of Economic Research, Inc.
    4. Ricardo J. Caballero & Eduardo M. R. A. Engel, 1993. "Microeconomic Adjustment Hazards and Aggregate Dynamics," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 108(2), pages 359-383.
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    6. Caballero, Ricardo J & Engel, Eduardo M R A, 1992. "Beyond the Partial-Adjustment Model," American Economic Review, American Economic Association, vol. 82(2), pages 360-364, May.
    7. Eytan Sheshinski & Yoram Weiss (ed.), 1993. "Optimal Pricing, Inflation, and the Cost of Price Adjustment," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262193329, April.
    8. Caballero, Ricardo J & Engel, Eduardo M R A, 1991. "Dynamic (S, s) Economies," Econometrica, Econometric Society, vol. 59(6), pages 1659-1686, November.
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    11. Julio J. Rotemberg, 1987. "The New Keynesian Microfoundations," NBER Chapters, in: NBER Macroeconomics Annual 1987, Volume 2, pages 69-116, National Bureau of Economic Research, Inc.
    12. Andrew Caplin & John Leahy, 1991. "State-Dependent Pricing and the Dynamics of Money and Output," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(3), pages 683-708.
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    More about this item

    Keywords

    INFLATION ; PRICES ; MARKET STRUCTURE;
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • D49 - Microeconomics - - Market Structure, Pricing, and Design - - - Other

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