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Price setting during the coronavirus (COVID-19) pandemic

Author

Listed:
  • Henkel, Lukas
  • Wieland, Elisabeth
  • Błażejowska, Aneta
  • Conflitti, Cristina
  • Fabo, Brian
  • Fadejeva, Ludmila
  • Jonckheere, Jana
  • Karadi, Peter
  • Macias, Paweł
  • Menz, Jan-Oliver
  • Seiler, Pascal
  • Szafranek, Karol
Abstract
The coronavirus (COVID-19) pandemic caused a deep recession globally, as well as in the euro area, accompanied by a steep decline in inflation rates in 2020. This paper reviews some of the main challenges created by the pandemic for inflation measurement and provides micro price data analysis of how price setting has reacted to the strong COVID-19 shock. For this purpose, we use three different, but complementary, microdata sources for specific countries and sectors: micro price data underlying the official consumer price indices in Germany, Italy, Latvia and Slovakia; (scanner) data from German and Italian supermarkets; and online (web-scraped) prices for Poland. A common finding of the micro price studies in this paper is that state dependence significantly contributed to the price-setting response to the COVID-19 shock. Nevertheless, the extent and degree of responses varies widely by sector and even country, also depending on the severity of the pandemic situation. JEL Classification: D4, E31

Suggested Citation

  • Henkel, Lukas & Wieland, Elisabeth & Błażejowska, Aneta & Conflitti, Cristina & Fabo, Brian & Fadejeva, Ludmila & Jonckheere, Jana & Karadi, Peter & Macias, Paweł & Menz, Jan-Oliver & Seiler, Pascal &, 2023. "Price setting during the coronavirus (COVID-19) pandemic," Occasional Paper Series 324, European Central Bank.
    • Handle: RePEc:ecb:ecbops:2023324
    Note: 1871516
    as

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    References listed on IDEAS

    as
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    More about this item

    Keywords

    consumer prices; COVID-19.; heterogeneity; inflation; microdata; price rigidity;
    All these keywords.

    JEL classification:

    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation

    NEP fields

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