10.17889/E109020V1
Hong, Gee Hee
Gorodnichenko, Yuriy
Coibion, Olivier
Replication data for: The Cyclicality of Sales, Regular and Effective Prices: Business Cycle and Policy Implications
ICPSR Inter-university Consortium for Political and Social Research
2014
10.1257/aer.20121546
10.1257/aer.20121546
1
We study the cyclical properties of sales, regular price changes, and average prices paid by consumers (\"effective\" prices) using data on prices and quantities sold for numerous retailers across many US metropolitan areas. Inflation in the effective prices paid by consumers declines significantly with higher unemployment while little change occurs in the inflation rate of prices posted by retailers. This difference reflects the reallocation of household expenditures across retailers, a feature of the data which we document and quantify, rather than sales. We propose a simple model with household store-switching and assess its implications for business cycles and policymakers. (JEL D12, E31, E32, L25, L81)