Price Setting in German Manufacturing: New Evidence from New Survey Data

37 Pages Posted: 15 Dec 2005

See all articles by Harald Stahl

Harald Stahl

Deutsche Bundesbank - Economics Department

Multiple version iconThere are 2 versions of this paper

Date Written: December 2005

Abstract

This paper presents new evidence on the formation of producer prices based on a onetime survey that was conducted on a sample of 1200 German firms in manufacturing in June 2004. Most of the firms have price-setting power and apply mark-up pricing. Indexation is negligible. Fixed nominal contracts are the most important reason for postponing a price adjustment. The second most likely reason is coordination failure, which causes more upward than downward stickiness. For every second firm both reasons are important. Firms can be assigned to four different groups according to an increasing complexity of reasons of price stickiness.

Keywords: Price rigidity, cluster analysis

JEL Classification: E30, D40

Suggested Citation

Stahl, Harald, Price Setting in German Manufacturing: New Evidence from New Survey Data (December 2005). ECB Working Paper No. 561. Available at SSRN: https://ssrn.com/abstract=868433

Harald Stahl (Contact Author)

Deutsche Bundesbank - Economics Department ( email )

Wilhelm-Epstein-Strasse 14
60431 Frankfurt am Main
Germany

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