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  5. New Facts on Consumer Price Rigidity in the Euro Area

New Facts on Consumer Price Rigidity in the Euro Area

  • Erwan Gautier
  • Cristina Conflitti
  • Riemer P. Faber
  • Brian Fabo
  • Ludmila Fadejeva
  • Valentin Jouvanceau
  • Jan-Oliver Menz
  • Teresa Messner
  • Pavlos Petroulas
  • Pau Roldan-Blanco
  • Fabio Rumler
  • Sergio Santoro
  • Elisabeth Wieland
  • Hélène Zimmer
American Economic Journal: Macroeconomics (Forthcoming)

Abstract

Using CPI micro data for 11 euro-area countries over the period 2010–2019, we document new findings on consumer price rigidity in the euro area: (i) the average frequency of price changes is 12% (ii) the distribution of price changes is highly dispersed with frequent large and small changes (iii) price changes are more frequent in January (iv) the overall size of price changes rises with inflation but their frequency does not; these changes in the size are driven by movements in the fraction of price changes that are increases and not by the absolute size of price increases or decreases.

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