Five Facts about Prices: A Reevaluation of Menu Cost Models

  title={Five Facts about Prices: A Reevaluation of Menu Cost Models},
  author={Emi Nakamura and J{\'o}n Bjarni Steinsson},
  journal={Quarterly Journal of Economics},
We establish five facts about prices in the U.S. economy: (1) For consumer prices, the median frequency of nonsale price change is roughly half of what it is including sales (9–12% per month versus 19–20% per month for identical items; 11–13% per month versus 21–22% per month including product substitutions). The median frequency of price change for finished-goods producer prices is comparable to that of consumer prices excluding sales. (2) One-third of nonsale price changes are price decreases… 

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