Price setting before and during the pandemic: evidence from Swiss consumer prices

85 Pages Posted: 5 Dec 2022

See all articles by Barbara Rudolf

Barbara Rudolf

Swiss National Bank

Pascal Seiler

ETH Zürich - KOF Swiss Economic Institute; European Central Bank (ECB)

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Date Written: December 1, 2022

Abstract

We provide new evidence on price rigidity at the product level based on microdata underlying the Swiss consumer price index from 2008 to 2020. We find that the frequency of price changes has increased over the last decade, particularly among products where collection switched to online prices, reflecting the rise of e-commerce. Furthermore, price changes tend to be synchronized within rather than across stores. Time variations in inflation can be attributed mainly to variations in the frequency of both price increases and price decreases. In the first year of the pandemic, the frequency of price adjustments changed little on average, while temporary sales responded countercyclically to the respective demand conditions across sectors.

Keywords: Price rigidity, price-setting behavior, consumer prices, inflation, COVID-19 pandemic

JEL Classification: E31, E5, L11

Suggested Citation

Rudolf, Barbara and Seiler, Pascal, Price setting before and during the pandemic: evidence from Swiss consumer prices (December 1, 2022). Swiss National Bank Working Paper No. 12/22, Available at SSRN: https://ssrn.com/abstract=4291111 or http://dx.doi.org/10.2139/ssrn.4291111

Barbara Rudolf (Contact Author)

Swiss National Bank ( email )

Borsenstrasse 15
CH-8022 Zurich
Switzerland

Pascal Seiler

ETH Zürich - KOF Swiss Economic Institute ( email )

Zurich
Switzerland

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

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