NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Why are Prices Sticky? Preliminary Results from an Interview Study

Alan S. Blinder

NBER Working Paper No. 3646
Issued in March 1991
NBER Program(s):   EFG

This paper reports preliminary results from a large research project on business pricing which is currently underway. The idea is to use interviews with actual price setters to assess the validity of a dozen theories of price stickiness. The rather unorthodox (for economists) methodology is defended; the research design is described briefly; and a few results based on the first 72 interviews (out of a projected 200) are presented. This sample suggests that the median firm changes its price annually and that price adjustments typically lag 3-4 months behind shocks to demand or cost.

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Document Object Identifier (DOI): 10.3386/w3646

Published: American Economic Review, Vol. 81, No. 2, pp.89-96, May 1991. citation courtesy of

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