This paper presents new evidence on the patterns of price and wage adjustment in European firms and on the extent of nominal rigidities. It uses a unique dataset collected through a firm-level survey conducted in a broad range of countries and covering various sectors. Several conclusions are...

This paper uses firm level survey data from Portugal to investigate how firms adjust their labour costs in the presence of wage rigidities. We document that Portuguese firms, besides reducing employment or freezing nominal base wages, also make frequent use of other cost-cutting strategies, like...

This paper discusses the identification of the determinants of downward wage rigidity and provides new empirical evidence concerning its importance in Europe. It is shown that the models estimated so far in the literature suffer from econometric problems that prevent the contributions of those...

This study investigates the pricing behaviour of firms in the euro area on the basis of surveys conducted by nine Eurosystem national central banks. Overall, more than 11,000 firms participated in the survey. The results are very robust across countries. Firms operate in monopolistically...

In recent years, one has witnessed a widespread attention on the way monetary policy is conducted and in particular on the role of the so-called monetary policy rules. The conventional approach in the literature consists in estimating reaction functions for a monetary authority (the Federal...

Understanding the determinants of individual price setting behaviour is crucial for the formulation of monetary policy, especially in an economy experiencing ongoing structural change. These behavioural mechanisms play a fundamental role in influencing the characteristics of aggregate inflation...

This paper presents original evidence on price setting in the euro area at the individual level. We use micro data on consumer (CPI) and producer (PPI) prices, as well as survey information. Our main findings are: (i) prices in the euro area are sticky and more so than in the US; (ii) there is...

This paper analyses the results of a survey conducted by the Banco de Portugal between May and September 2004 on a sample of 1370 Portuguese firms with the main purpose of investigating their price setting behaviour. The evidence points to the presence of a considerable degree of price...

This paper presents the main findings of a survey conducted on a sample of Portuguese firms. The main aim was to identify some relevant characteristics about the dynamics of prices and wages in Portugal. The most important conclusions are: i) changes to wages are more synchronized than changes...