Relative Price Variability and Inflation: Evidence from U.S. Cities

JOURNAL OF POLITICAL ECONOMY, Vol. 105, No. 1, February 1997

Posted: 24 Feb 1997

See all articles by Guy Debelle

Guy Debelle

Reserve Bank of Australia

Owen A. Lamont

Harvard University - Department of Economics

Abstract

We test whether the time-series positive correlation of inflation and intermarket relative price variability is also present in a cross section of U.S. cities. We find this correlation to be a robust empirical regularity: cities that have higher than average inflation also have higher than average relative price dispersion, ceteris paribus. This result holds for different periods of time, for different classes of goods, and across different time horizons. Our results suggest that at least part of the relationship between inflation and relative price variability cannot be explained by monetary factors.

JEL Classification: E31, R12

Suggested Citation

Debelle, Guy and Lamont, Owen A., Relative Price Variability and Inflation: Evidence from U.S. Cities. JOURNAL OF POLITICAL ECONOMY, Vol. 105, No. 1, February 1997. Available at SSRN: https://ssrn.com/abstract=3752

Guy Debelle

Reserve Bank of Australia ( email )

65, Martin Place
Sydney, NSW 2000
Australia

Owen A. Lamont (Contact Author)

Harvard University - Department of Economics ( email )

Littauer Center
Cambridge, MA 02138
United States

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