Much of Consumer Price Index (CPI) inflation for consumer durables reflects shifts to newer product models that display higher prices, not price increases for a given set of goods. I examine how these higher prices for new models should be divided between quality growth and price inflation based...

In standard pricing models, movements in demand are partially offset by price responses. In a customer market, however, price markups may decrease with high demand. Thus, price may magnify, rather than stabilize, demand movements. The author considers a monopolist selling a good of which...

The author tests for the importance of wage rigidities from long-term contracts by observing how employment responds when firms and workers recontract. If rigidities are important, then employment should adjust after recontracting to partially undo its movements during the past contract. The...

In the United States, the average 40-year-old plant employs more than seven times as many workers as the typical plant 5 years or younger. In contrast, surviving plants in India and Mexico exhibit much slower growth, roughly doubling in size over the same age range. The divergence in plant...

In the 1988-2004 microdata collected by the U.S. Bureau of Labor Statistics for the Consumer Price Index, price changes are frequent (every 4-7 months, depending on the treatment of sale prices) and large in absolute value (on the order of 10%). The size and timing of price changes vary...

Resource misallocation can lower aggregate total factor productivity (TFP). We use microdata on manufacturing establishments to quantify the potential extent of misallocation in China and India versus the United States. We measure sizable gaps in marginal products of labor and capital across...