Authors:

  • Gita Gopinath

Excerpt

Frequency of Price Adjustment and Pass-through. Gopinath, Gita, and Oleg Itskhoki. 2010, Paper. "We empirically document using U.S. import prices that on average goods with a high frequency of price adjustment have a long-run pass-through that is at least twice as high as that of low-frequency adjusters. We show theoretically that this relationship should follow because variable mark-ups that reduce long-run pass-through also reduce the curvature of the profit function when expressed as a function of the cost shocks, making the firm less willing to adjust its price. Lastly, we quantitatively evaluate a dynamic menu-cost..." Link