00000nam 2200000za 4500 9.824685 CaOODSP 20221107144201 cr ||||||||||| 160923s2016 oncd ob f000 0 eng d CaOODSP eng eng fre n-cn--- FB3-5/2016-43E-PDF Benedict, Craig. On what states do prices depend? Answers from Ecuador [electronic resource] / by Craig Benedict, Mario J. Crucini and Anthony Landry. [Ottawa] : Bank of Canada, c2016. ii, 24 p. : graphs. Staff Working Paper, 1701-9397 ; 2016-43 "September 2016." Includes bibliographical references. "In this paper, we argue that differences in the cost structures across sectors play an important role in firms’ decisions to adjust their prices. We develop a menu-cost model of pricing in which retail firms intermediate trade between producers and consumers. An important facet of our analysis is that the labor-cost share of retail production differs across goods and services in the consumption basket. For example, the price of gasoline at the retail pump is predicted to adjust more frequently and by more than the price of a haircut because of the high volatility in wholesale gasoline prices relative to the wages of unskilled labor, even when both retailers face a common menu cost. This modeling approach allows us to account for some of the cross-sectional differences observed in the frequency of price adjustments across goods. We apply this model to Ecuador to takeadvantage of inflation variations and the rich panel of monthly retail prices"--Abstract. Text in English, abstract in English and French. gccst Pricing gccst Economic analysis Crucini, Mario J. (Mario John), 1962- Landry, Anthony Emmanuel. Bank of Canada. Staff working paper (Bank of Canada) 1701-9397 ; 2016-43 (CaOODSP)9.806221 PDF 636 KB https://publications.gc.ca/collections/collection_2016/banque-bank-canada/FB3-5-2016-43-eng.pdf