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STICKY PRICES IN THE EURO AREA: A SUMMARY OF NEW MICRO-EVIDENCE
Article first published online: 13 DEC 2010
DOI: 10.1162/jeea.2006.4.2-3.575
2006 European Economic Association
Issue
1542-4774/asset/cover.gif?v=1&s=b490feec1210fbdb3b37031746fa2804fec9eb7d "Journal of the European Economic Association")
Journal of the European Economic Association
Volume 4, Issue 2-3, pages 575–584, April-May 2006
Additional Information
How to Cite
Álvarez, L. J., Dhyne, E., Hoeberichts, M., Kwapil, C., Le Bihan, H., Lünnemann, P., Martins, F., Sabbatini, R., Stahl, H., Vermeulen, P. and Vilmunen, J. (2006), STICKY PRICES IN THE EURO AREA: A SUMMARY OF NEW MICRO-EVIDENCE. Journal of the European Economic Association, 4: 575–584. doi: 10.1162/jeea.2006.4.2-3.575
Publication History
- Issue published online: 13 DEC 2010
- Article first published online: 13 DEC 2010
- Abstract
- References
- Cited By
Abstract
This paper summarises the vast evidence on micro price-setting recently obtained for euro area countries. We consider studies with micro data on consumer and producer prices, as well as survey information. The main findings are: (1) prices in the euro area are sticky and stickier than in the US; (2) downward price rigidity is only slightly more marked than upward price rigidity; (3) heterogeneity and asymmetries are observed in price-setting; and (4) the relevance of theories that explain price stickiness, such as implicit or explicit contracts, marginal costs, and coordination failure, is confirmed, whereas menu costs, pricing thresholds, and costly information explanations are judged much less relevant by firms. (JEL: C25, D40, E31)