Replication data for: Evaluating Microfoundations for Aggregate Price Rigidities: Evidence from Matched Firm-Level Data on Product Prices and Unit Labor Cost

Principal Investigator(s): View help for Principal Investigator(s) Mikael Carlsson; Oskar Nordström Skans

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Project Citation:

Carlsson, Mikael, and Skans, Oskar Nordström. Replication data for: Evaluating Microfoundations for Aggregate Price Rigidities: Evidence from Matched Firm-Level Data on Product Prices and Unit Labor Cost. Nashville, TN: American Economic Association [publisher], 2012. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2019-10-11. https://doi.org/10.3886/E112531V1

Project Description

Summary: Using matched data on product-level prices and the producing firm's unit labor cost, we find a moderate pass-through of current idiosyncratic marginal-cost changes. Also, the response does not vary across firms facing very different idiosyncratic shock variances, but identical aggregate conditions. These results do not fit the predictions of Mackowiak and Wiederholt (2009). Neither do firms react strongly to predictable marginal-cost changes, as expected from Mankiw and Reis (2002). We find that firms consider both current and expected future marginal cost when setting prices. This points toward impediments to continuous price adjustments as a key driver of monetary non-neutrality.

Scope of Project

Subject Terms: Administrative data; Survey Data

JEL Classification:
      D24 Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
      D86 Economics of Contract: Theory
      E12 General Aggregative Models: Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
      E32 Business Fluctuations; Cycles
      E52 Monetary Policy
      L11 Production, Pricing, and Market Structure; Size Distribution of Firms

Geographic Coverage: Sweden

Time Period(s): 1990 – 2002

Data Type(s): survey data; administrative records data

Methodology

Data Source: Statistics Sweden

Unit(s) of Observation: Plants, Goods and Workers,

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Published Versions

V1 [2019-10-11]

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DDI 2.5

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