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Impact of the degree of price rigidity on the possibilities of monetary policy
[Влияние Степени Жесткости Цен На Возможности Денежно-Кредитной Политики]

Author

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  • Bozhechkova, Alexandra (Божечкова, Александра)

    (The Russian Presidential Academy of National Economy and Public Administration)

  • Dobronravova, Elizaveta (Добронравова, Елизавета)

    (The Russian Presidential Academy of National Economy and Public Administration)

  • Evseev, Alexey (Евсеев, Алексей)

    (The Russian Presidential Academy of National Economy and Public Administration)

  • Shemyakina, Kira (Шемякина, Кира)

    (The Russian Presidential Academy of National Economy and Public Administration)

  • Trunin, Pavel (Трунин, Павел)

    (The Russian Presidential Academy of National Economy and Public Administration)

Abstract

In this paper we estimate the level of price rigidity in Russian economy. First we review the main theoretical models of price setting, the methods used to estimate the level of price rigidity using micro-data on the prices of particular goods and services and indirectly using the data on the dynamics of macroeconomic indicators. Then we present the results of microestimates of price rigidity based on online-prices, which were collected using web-scrapping techniques. The average price duration for food commodities is estimated at 2.6 months. We also do the calibration of price rigidity parameters in a structural model of the production sector using macroeconomic data. According to our estimates, the average price duration in Russian economy doesn’t exceed 4.5 months, which is much less than standard values (3-4 quarters) used in DSGE-models.

Suggested Citation

  • Bozhechkova, Alexandra (Божечкова, Александра) & Dobronravova, Elizaveta (Добронравова, Елизавета) & Evseev, Alexey (Евсеев, Алексей) & Shemyakina, Kira (Шемякина, Кира) & Trunin, Pavel (Трунин, Павел, 2020. "Impact of the degree of price rigidity on the possibilities of monetary policy [Влияние Степени Жесткости Цен На Возможности Денежно-Кредитной Политики]," Working Papers 052013, Russian Presidential Academy of National Economy and Public Administration.
    • Handle: RePEc:rnp:wpaper:052013
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