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A note on measuring the importance of the uniform nonsynchronization hypothesis

Silva, JMCS, Marques, CR and Dias, D (2007) A note on measuring the importance of the uniform nonsynchronization hypothesis Economics Bulletin, 4 (6). pp. 1-8.

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Abstract

In this note we reappraise the measure of the importance of time-dependent price setting rules suggested by Klenow and Kryvtsov (2005, "State-Dependent or Time-Dependent Pricing: Does It Matter for Recent U.S. Inflation?," Bank of Canada Working Paper 05-4). Furthermore, we propose an alternative way to gauge the significance of this type of price setting behavior, which can be interpreted as an upper bound for the proportion of price trajectories which are compatible with the uniform nonsynchronization hypothesis. The merits of the proposed measure are highlighted in an application using micro-data. Our results suggest that a large proportion of price trajectories may be compatible with simple time-dependent price setting mechanisms, but the strength of this evidence very much depends on the way that is used to evaluate the importance of this type of behavior.

Item Type: Article
Authors :
NameEmailORCID
Silva, JMCSUNSPECIFIEDUNSPECIFIED
Marques, CRUNSPECIFIEDUNSPECIFIED
Dias, DUNSPECIFIEDUNSPECIFIED
Date : 2007
Uncontrolled Keywords : D4, L1, perfect synchronization.
Depositing User : Symplectic Elements
Date Deposited : 16 May 2017 15:35
Last Modified : 16 May 2017 15:35
URI: http://epubs.surrey.ac.uk/id/eprint/820670

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