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| Benjamin Eden, Maya Eden and Jonah Yuen |
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| ''Temporary sales in response to aggregate shocks'' |
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| This paper studies the role of temporary sales in the reaction to aggregate shocks. Using scanner data from supermarkets, we establish the following stylized facts: (a) The fraction of stores that offer sale prices fluctuate over weeks; (b) Goods with more fluctuations in regular prices have also more sales; (c) Temporary sales contribute substantially to the weekly variation of the average cross-sectional price of the typical good; (d) High prices appear to be more rigid than low prices. These findings can be rationalized by a model in which prices are completely flexible and temporary sales are reactions to unwanted inventories which accrue in response to aggregate demand shocks. |
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| Keywords: Temporary Sales, Unwanted Inventories, Sequential Trade |
JEL: E0 - Macroeconomics and Monetary Economics: General
D4 - Market Structure and Pricing: General |
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| Manuscript Received : Feb 11 2019 | | Manuscript Accepted : Mar 25 2019 |
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