MIGGROPRICES Research Topics


Functioning of Retail Markets and Welfare Costs of Market Segmentations (INTEGRATION)

Members working in the research area “INTEGRATION” focus on analyzing patterns in intra- and international (micro) price-setting and deriving implications for the structure of the concerned goods markets. Our intended contributions include a comprehensive assessment of the degree of integration/segmentation across major EU goods markets and an explicit welfare-theoretic assessment of the observed price differences across EU countries.

Researchers

Micro Price Dynamics and Macroeconomic Dynamics (MACRO)

To evaluate macro-oriented policies, general equilibrium models have been widely employed. New Keynesian models are the most prominent representatives of this class, extensively used to study in particular the effects of - and interactions between - monetary and fiscal policies. A key ingredient of New Keynesian models is the existence of rigidities in (nominal) wage and price setting. The proper - theoretical and empirical - specification of the wage and price adjustment mechanism has crucial importance for the model’s qualitative and quantitative implications. Work in the project area “MACRO” aims at contributing to the literature on general equilibrium models by providing new insights into price setting at the micro level and drawing implications of these findings for macro modelling.

Researchers

Cost Pass-Through (PASS-THROUGH)

Since price is the key instrument connecting the different levels of the vertical supply chain, an understanding of pass-through – the transmission of costs to prices – is critical to macroeconomics and can provide insights into how efficiently markets are working. Moreover, its comprehension provides implications for inflation and the real effects of monetary policy and shocks to individual cost components like wage and commodity prices. In order to examine the pass-through mechanism and come up with macroeconomic implications it is necessary to provide stylized facts from the microeconomics. The central aim of research conducted in the area “PASS-THROUGH” is to examine cost pass-through across major EU goods and provide policy implications.

Researchers

Scanner Prices and Competitiveness Measures (COMPETITIVENESS)

The unique feature of scanner data is the simultaneous track of quantity and expenditure (price) on all transactions including detailed information on product attributes. Being collected continuously, scanner data provide information with a short lag. All these make them different from the statistical sample, the figures of which are collected at a discrete frequency and where changes in shopping patterns and goods are slowly incorporated. As a consequence of this inappropriate capturing of substitution patterns, an overestimation in the computation of the Consumer Price Index (CPI) can result. Our unique data on microprices allow us to contribute to this research area and to provide for improved measures of (aggregate) price and international price competitiveness measures.

Researchers