2022/02/24 by Sohei Kaihatsu, Mitsuru Katagiri, Noriyuki Shiraki · 5 citations
Economics, Econometrics and Finance · Mathematics · #Computer science #Construct (python library) #Consumption (sociology) #Correlation #Deflation #Distribution (mathematics) #Econometrics #Economic theories and models #Economics #Economics of Agriculture and Food Markets #Inflation (cosmology) #Keynesian economics #Macro #Macroeconomics #Mathematics #Monetary Policy and Economic Impact #Monetary economics #Monetary policy #Phillips curve #Private consumption
paper · doi:10.1111/jmcb.12921
published in Journal of money credit and banking 55(5), 1271-1305 (Wiley)
openalex publication_date 2022/02/24 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/27
Abstract The relationship between inflation dynamics and micro‐level pricing behavior is an underexplored research area. In this article, we first document that deflationary periods in Japan were associated with (i) variations in the distribution of price changes at the micro level, and (ii) a weakening in the Phillips correlation at the macro level. We construct a multisector general equilibrium model with sector‐specific menu costs, a feature that is supported by our estimation using sectoral data, and show that declining trend inflation and an increasing share of services in private consumption together can quantitatively explain the above two observations.