Relative Price Dispersion and Inflation: Evidence for the UK and the US
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Relative Price Dispersion and Inflation: Evidence for the UK and the US
Aksoy, Gulnihal | Bredin, Don | Corcoran, Deirdre | Fountas, Stilianos
Credit and Capital Markets – Kredit und Kapital, Vol. 50 (2017), Iss. 1 : pp. 3–24
2 Citations (CrossRef)
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Aksoy, Gulnihal
Bredin, Don
Corcoran, Deirdre
Stilianos Fountas, University of Macedonia, Department of Economics, Thessaloniki, Greece
Cited By
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The Effects of Inflation on Relative Price Variability: The Importance of Price Regimes
Cerda, Rodrigo Andres | Luders, Rolf J. | Silva, lvaroSSRN Electronic Journal , Vol. (2017), Iss.
https://doi.org/10.2139/ssrn.3029916 [Citations: 0] -
Price controls, hyperinflation, and the inflation–relative price variability relationship
Cerda, Rodrigo | Silva, Alvaro | Lüders, RolfEmpirical Economics, Vol. 61 (2021), Iss. 4 P.1725
https://doi.org/10.1007/s00181-020-01953-w [Citations: 0]
Abstract
One potential real effect of inflation is its influence on the dispersion of relative prices in the economy which affects economic efficiency and aggregate output. Using a novel data set for the US and UK and a VARMA asymmetric bivariate GARCH-M model of inflation and relative price dispersion, we test for the effects of inflation and inflation uncertainty on relative price dispersion. We obtain two main results: First, inflation affects relative price dispersion positively in the US supporting the menu costs model and negatively in the UK supporting the monetary search model. Second, there is no evidence for the role of inflation uncertainty in explaining relative price dispersion, either for the US or the UK.
Table of Contents
| Section Title | Page | Action | Price |
|---|---|---|---|
| Gulnihal Aksoy et al.: Relative Price Dispersion and Inflation: Evidence for the UK and the US | 1 |