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Luis Julián Álvarez, Pablo Burriel and Ignacio Hernando
''Explaining cross-industry heterogeneity in price stickiness.''
( 2011, Vol. 31 No.1 )
This note explains cross industry heterogeneity in the frequency of price adjustment. We use the quasi-maximum approach of Papke and Wooldridge (1996) to avoid the shortcomings of OLS regressions to analyse frequencies. We pay particular attention to the role of costs and market competition in explaining cross-industry differences. We find that prices are stickier the higher the labour cost share and the lower are competition and the intermediate input share.
Keywords: producer prices, frequency of price changes, market competition, cost structure
JEL: E3 - Prices, Business Fluctuations, and Cycles: General (includes Measurement and Data)
D4 - Market Structure and Pricing: General
Manuscript Received : Feb 23 2010 Manuscript Accepted : Feb 21 2011

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