Why Do Prices in Sierra Leone Change so Often?: A Case Study Using Micro-Level Price Data

29 Pages Posted: 23 Mar 2006

See all articles by Arto Kovanen

Arto Kovanen

International Monetary Fund (IMF) - African Department

Date Written: February 2006

Abstract

We use cross-section and time-series techniques to analyze pricing behavior in Sierra Leone. In cross-sectional data, we find that inflation volatility and product diversification are the main factors explaining differences in the frequency of price adjustments. We show that variance in the fraction of prices subject to change is a key determinant of inflation volatility in Sierra Leone, indicating that retail prices are sensitive to economic events. We explain variations in this fraction over time with past inflation and monetary growth, which are important policy variables.

Keywords: Inflation and price stickiness

JEL Classification: E31

Suggested Citation

Kovanen, Arto, Why Do Prices in Sierra Leone Change so Often?: A Case Study Using Micro-Level Price Data (February 2006). IMF Working Paper No. 06/53, Available at SSRN: https://ssrn.com/abstract=892944

Arto Kovanen (Contact Author)

International Monetary Fund (IMF) - African Department ( email )

1700 19th Street, NW
Washington, DC 20431
United States

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