Understanding Price Stickiness: Firm‐level Evidence on Price Adjustment Lags and Their Asymmetries

• DOI: 10.1111/obes.12083
• Publication Date: 2014-12-09T17:36:22Z
• Authors: Daniel A. Dias; Carlos Robalo Mar...; Fernando Martins; J. M. C. Santos S...
• Keywords: Price setting

Abstract We study the speed of price reactions to positive and negative demand cost shocks. Our findings suggest that adjustment lags vary in line with predictions optimal setting models. Moreover, we find firms' are asymmetric, these asymmetries cannot be fully explained by any single theoretical model asymmetric adjustment. Overall, results reaction monetary policy shocks may depend on which firms or sectors particularly affected them and, therefore, richer models needed understand effects policy.