Israeli paper examines price-setting behaviour
A Bank of Israel discussion paper published yesterday argues that consumer prices are "moderately sticky" with a mean duration between price changes of six to nine months.
The paper – Price Setting Behaviour in Israel: An Empirical Analysis Using Microdata, by Sigal Ribon and Doron Sayag – says the average price change is an increase of 3.5%.
Around a third of all changes are reductions, and the average reduction is around 10%. Similarly, the average size of a price increase is a "substantial"
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