The Cyclicality of Sales, Regular and Effective Prices: Business Cycle and Policy Implications: Reply
American Economic Review
vol. 109,
no. 1, January 2019
(pp. 314-24)
Abstract
We address how using different censoring thresholds and imputation procedures affects the baseline results of Coibion, Gorodnichenko, and Hong (2015). Higher censoring thresholds introduce measurement error and outliers that generate wide variability in results across weighting schemes, but methods that explicitly control for outliers confirm the results of Coibion et al. (2015) for all censoring thresholds. We also illustrate how the BLS's approach to imputing missing prices can introduce a cyclical bias into measures of posted price inflation when store-switching is present in the data.Citation
Coibion, Olivier, Yuriy Gorodnichenko, and Gee Hee Hong. 2019. "The Cyclicality of Sales, Regular and Effective Prices: Business Cycle and Policy Implications: Reply." American Economic Review, 109 (1): 314-24. DOI: 10.1257/aer.20171338Additional Materials
JEL Classification
- D12 Consumer Economics: Empirical Analysis
- E31 Price Level; Inflation; Deflation
- E32 Business Fluctuations; Cycles
- L25 Firm Performance: Size, Diversification, and Scope
- L81 Retail and Wholesale Trade; e-Commerce