Nominal Rigidities and Retail Price Dispersion in Canada Over the Twentieth Century

44 Pages Posted: 21 Jun 2010 Last revised: 8 Jul 2010

See all articles by Ross D. Hickey

Ross D. Hickey

Simon Fraser University (SFU)

David S. Jacks

Simon Fraser University (SFU) - Department of Economics; National Bureau of Economic Research (NBER)

Date Written: June 2010

Abstract

We introduce a new data set on over 230,000 monthly prices for 10 goods in 50 Canadian cities over the 40 year period from 1910 to 1950. This coupled with previously published price information from the late twentieth century allows us to present one of the first comprehensive views of nominal rigidities and retail price dispersion over the past 100 years. We find that nominal rigidities have been conditioned upon prevailing rates of inflation with a greater frequency of price changes occurring in the 1920s and the 1970s. Additionally, the process of retail market integration has surprisingly followed a U-shaped trajectory, with many domestic markets being better integrated--as measured by the average dispersion of retail prices--at mid-century than in the 1990s. We also consider the linkages between nominal rigidities and price dispersion, finding results consistent with present-day data.

Suggested Citation

Hickey, Ross D. and Jacks, David S., Nominal Rigidities and Retail Price Dispersion in Canada Over the Twentieth Century (June 2010). NBER Working Paper No. w16098, Available at SSRN: https://ssrn.com/abstract=1626588

Ross D. Hickey (Contact Author)

Simon Fraser University (SFU) ( email )

8888 University Drive
Burnaby, British Columbia V5A 1S6
Canada

David S. Jacks

Simon Fraser University (SFU) - Department of Economics ( email )

8888 University Drive
Burnaby, British Columbia V5A 1S6
Canada

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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