American Economic Review Vol. 109 No. 1 2019

The Cyclicality of Sales, Regular and Effective Prices: Business Cycle and Policy Implications: Reply

Olivier Coibion¹; Yuriy Gorodnichenko²; Gee Hee Hong³

¹ Department of Economics, University of Texas-Austin, 2225 Speedway, BRB 3.156 C100, Austin, TX 87812 (email: ) · ² Department of Economics, University of California-Berkeley, 530 Evans Hall #3880, Berkeley, CA 94720 (email: ) · ³ International Monetary Fund, 700 19th Street NW, Washington, DC 20431 (email: )

Abstract

We address how using different censoring thresholds and imputation procedures affects the baseline results of Coibion, Gorodnichenko, and Hong (2015). Higher censoring thresholds introduce measure ment error and outliers that generate wide variability in results across weighting schemes, but methods that explicitly control for outliers confirm the results of Coibion, Gorodnichenko, and Hong (2015) for all censoring thresholds. We also illustrate how the BLS’s approach to imputing missing prices can introduce a cyclical bias into measures of posted price inflation when store-switching is present in the data.

DOI

10.1257/aer.20171338

Volume

109

Issue

1

Pages

314-324

Language

en

Sources

bibtex:phds-export.bib openalex crossref

Cite

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