Dynamics of the U.S. Price Distribution / David Berger, Joseph Vavra.

Format:

Book

Author/Creator:

Berger, David.

Contributor:

National Bureau of Economic Research.

Vavra, Joseph.

Series:

Working Paper Series (National Bureau of Economic Research) no. w21732.

NBER working paper series no. w21732

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2015.

Summary:

We use microdata underlying U.S. consumer, producer and import price indices to document how the distribution of price changes evolves over time. Two striking features characterize pricing at each stage of production: 1) Frequency is countercyclical. 2) Frequency is correlated with variance. Conversely, other statistics which have received recent attention, like kurtosis, do not exhibit uniform patterns across our datasets. What implications do our empirical results have for monetary policy? Using a flexible accounting framework which collapses the high-dimensional distribution of price changes into a single measure of aggregate price flexibility, we show that flexibility is highly variable and countercyclical.

Notes:

Print version record

November 2015.