Examining the Behaviour of Individual UK Consumer Prices

Bibliographic Data

ID9706090
AuthorsPhilip Dane Bunn (0000-0002-0710-3382, Bank of England), Philip Bunn (Bank of England University of Birmingham), Colin Ellis (0000-0002-2908-5269, Bank of England University of Birmingham)
Year2012
Volume122
Issue558
PagesF35-F55
Publication date2012-02-01
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueThe Economic Journal (JOURNAL)
Journal identifiersISSN: 0013-0133 • E-ISSN: 1468-0297
PublisherOxford University Press (OUP) (PUBLISHER)
DOI10.1111/j.1468-0297.2011.02490.x
OpenAlexW1645073811
LanguageEN
Citations received3
References cited15

This article examines how UK consumer prices behave, using two databases with millions of price observations: the microdata that underpin official Consumer Prices Index data and a database of supermarket prices. Prices do not change continuously but our key finding is the marked heterogeneity in the data. That is not consistent with standard microeconomic foundations that typically form the basis of macroeconomic policy models. Declining hazard functions and the distribution of price changes also argue against representative agent models. Our results suggest further work is needed to find a model of price‐setting that genuinely corresponds to how individual UK consumer prices behave

Consumer demand · Consumer price index (South Africa · Econometrics · Economics · Financial economics · Microdata (statistics · Microeconomics · Monetary economics · Monetary policy · Population · Price index · Price setting · Economic theories and models · Economics of Agriculture and Food Markets · Monetary Policy and Economic Impact