When inflation is low and aggregate shocks are small, prices tend to be sticky and the proportion of price changes is broadly constant. When aggregate shocks are large, models predict that prices will adjust more frequently, implying that ‘large shocks travel fast’. This column provides new evidence on the stickiness of consumer prices in the euro area during the 2021-2024 inflation episode. Retailers facing a large but transitory shock did indeed increase their frequency of price changes,

Tag-uri: Inflatie