Consumer Price Adjustment Under the Microscope: Germany in a Period of Low Inflation

109 Pages Posted: 20 Jul 2006

See all articles by Johannes Hoffmann

Johannes Hoffmann

Deutsche Bundesbank - Economics Department

Jeong-Ryeol Kurz-Kim

Deutsche Bundesbank

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Date Written: July 2006

Abstract

We analyse the adjustment of retail and services prices in a period of low inflation, using a set of individual price data from the German Consumer Price Index that covers the years 1998 to 2003. We strong find evidence of time- and state-dependent price adjustment. Most importantly, the differences in "unconditional" sectoral price flexibility are found to be linked to input price volatility.

Keywords: price rigidity, price flexibility, Consumer Price Index, Germany

JEL Classification: E31, D43, L11

Suggested Citation

Hoffmann, Johannes and Kurz-Kim, Jeong-Ryeol, Consumer Price Adjustment Under the Microscope: Germany in a Period of Low Inflation (July 2006). ECB Working Paper No. 652, Available at SSRN: https://ssrn.com/abstract=911264

Johannes Hoffmann (Contact Author)

Deutsche Bundesbank - Economics Department ( email )

Wilhelm-Epstein-Strasse 14
60431 Frankfurt am Main
Germany
0049 69 9566 2320 (Phone)
0049 69 9566 4317 (Fax)

Jeong-Ryeol Kurz-Kim

Deutsche Bundesbank ( email )

Wilhelm-Epstein-Str. 14
Frankfurt/Main, 60431
Germany

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