ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

Shesadri BanerjeeSubscribe to Shesadri Banerjee

Micro-level Price Setting Behaviour in India

In the contemporary literature of macroeconomics, the mainstream frameworks for policy evaluation have recognised the significance of price rigidities, emerging from the micro-level pricing behaviour of firms, to explain the short- and medium-run effects of monetary policy interventions. The stickiness in price adjustment is evaluated in the context of the Indian economy by using the Consumer Price Index for Industrial Workers data. The findings suggest that the monthly frequency of price changes is greater for the food group compared to the non-food group, and evidences are also found of exogenous versus menu cost-driven pricing behaviour in India.
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