Time-dependent or state-dependent pricing? Evidence from a large devaluation episode

State-dependent and time-dependent price setting models yield distinct implications for how frequency and magnitude of price changes react to shocks. This note studies pricing behavior in Brazil following the large devaluation of the Brazilian Real in 1999 to distinguish between models. The results are consistent with state-dependent pricing.

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Year of publication:	2015-01
Authors:	guimaraes, bernardo ; Feltrin, Celio
Institutions:	Centre for Macroeconomics (CFM)
Subject:	state-dependent pricing \| time-dependent pricing \| currency devaluation \| frequency of price changes

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Extent:	application/pdf
Series:	Discussion Papers.
Type of publication:	Book / Working Paper
Notes:	Number 1504 12 pages
Classification:	E31 - Price Level; Inflation; Deflation ; E32 - Business Fluctuations; Cycles
Source:	RePEc - Research Papers in Economics

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