Price Changes in the Euro Area and the United States: Some Facts from Individual Consumer Price Data
Journal of Economic Perspectives
vol. 20,
no. 2, Spring 2006
(pp. 171-192)
(Complimentary)
Abstract
Prices of goods and services do not adjust immediately in response to changing demand and supply conditions. This paper characterizes the average frequency and size of price changes in the euro area and its member countries, investigates the determinants of the probability of price changes, and compares the evidence for the euro area with available U.S. results. The facts documented in this paper are based on evidence from individual price data recorded at the store level in all euro area countries except Ireland and Greece: that is in datasets covering Austria, Belgium, Finland, France, Germany, Italy, Luxembourg, the Netherlands, Portugal, and Spain, which together account for around 97 percent of euro area GDP. The data used are the monthly price records underlying the computation of national Consumer Price Indices and Harmonized Consumer Price Indices. These data cover a large number of products selected on the basis of extensive Household Budget Surveys.Citation
Dhyne, Emmanuel, Luis J. Alvarez, Herve Le Bihan, Giovanni Veronese, Daniel Dias, Johannes Hoffmann, Nicole Jonker, Patrick Lunnemann, Fabio Rumler, and Jouko Vilmunen. 2006. "Price Changes in the Euro Area and the United States: Some Facts from Individual Consumer Price Data." Journal of Economic Perspectives, 20 (2): 171-192. DOI: 10.1257/jep.20.2.171JEL Classification
- E31 Price Level; Inflation; Deflation
- L11 Production, Pricing, and Market Structure; Size Distribution of Firms
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