Pricing Decisions in the Euro Area

Silvia Fabiani is a senior economist at the Research Department of Banca d'Italia. Her recent research involves monitoring and forecasting the short-term developments of inflation in Italy and the euro area, styding long-term price dynamics and its determinants, and analyzing structural issues concerning price setting across countries and sectors.Claire Loupias was a senior economist at teh Research Department of Banque de France while writing this book. She is now Assistant Professor at EPEE, Universite d'Evry (France). Her recent research involves the analysis of price setting. She has worked in various fields such as the monetary transmission mechanism and population aging.Fernando Martins is a senior economist at the Research Department of the Banco de Portugal. The implementation of monetary policy under uncertainty and the analysis of price stickiness based on survey data are his most recent topics of research. He is also Professor of Statistics and Data Analysis at the Universidade Lusiada of Lisbon.Roberto Sabbatini is a senior economist at the Research Department of Banca d'Italia. His recent research involves the short-term analysis of the Italian economy and that of the euro area, including forecasting, the analysis of the inflationary process and its determinants, and the impact of the euro cash changeover on consumer prices in Italy as well as in the euro area.

• Ignazio Angeloni: ForewordContributorsIntroductionPart I: Firms' Pricing Behavior in the Euro Area: An Overview1: Stephen G. Cecchetti, Fernando Martins, Roberto Sabbatini, & Harald Stahl: The Use of Survey Data to Investigate Price Setting: Theory and the Research Design for the Euro Area2: Silvia Fabiani, Claire Loupias, Martine Druant, Ignacio Hernando, Claudia Kwapil, Bettina Landau, Fernando Martins, Thomas Mathä, Roberto Sabbatini, Harald Stahl, & Ad Stokman: Summary of Results for the Euro AreaPart II: Country-Specific Findings3: Claudia Kwapil, Josef Baumgartner, & Johann Scharler: Price Reactions to Demand and Cost Shocks: Survey Evidence from Austrian Firms4: Luc Aucremanne & Martine Druant: Why Are Prices Sticky? Evidence from an Ad Hoc Survey in Belgium5: Claire Loupias & Roland Ricart: Asymmetries in Price Setting: Some Evidence from French Survey Data6: Price Setting in German Manufacturing: Evidence from New Survey Data7: Silvia Fabiani, Angela Gattulli, & Roberto Sabbatini: The Pricing Behavior of Italian Firms: New Survey Evidence on Price Stickiness8: Patrick Lünnemann & Thomas Mathä: A Survey of Price-Setting Practices of Luxembourg Firms9: Marco Hoeberichts & Ad Stockman: The Pricing Behavior of Dutch Firms: Survey Evidence on Price Stickiness10: Fernando Martins: How Portuguese Firms Set Their Prices: Evidence from Survey Data11: Luis J. Álvarez & Ignacio Hernando: The Pricing Behavior of Spanish FirmsPart III: Comparative Analysis12: Patrick Lunnemann & Thomas Matha: A Comparison Based on International Survey Evidence13: Luis J. Álvarez & Ignacio Hernando: Competition and Price Adjustment in the Euro Area14: Roberto Santini, Luis J. Álvarez, Emmanuel Dhyne, Marco Hoeberichts, Herv´e Le Bihan, Patrick Lünnemann, Fernando Martins, Fabio Rumler, Harald Stahl, Philop Vermeulen, Giovanni Veronese, & Jouko Vilmunen: What Quantitative Micro Data Reveal about Price Setting BehaviorPart IV: Concluding Remarks and Implications15: Vítor Gaspar, Andrew Levin, Fernando Martins, & Frank Smets: Policy Lessons and Directions for Ongoing ResearchAppendix: The National QuestionnairesIndex

Knowing how firms set prices is crucial for central banks because it helps them understand the dynamics of aggregate inflation and throws light on how monetary impulses get transmitted through the economic system. Pricing Decisions in the Euro Area: How Firms Set Prices and Why is the first genuine attempt to document via direct surveys the mechanisms behind pricing decision of a large sample of entrepreneurs across a vast economic region. The book offers an unprecedented wealth of comparable microeconomic data and a key to interpret them, highlighting differences in pricing strategies among sectors, firm sizes and countries in the euro area, based on information that comes straight from the horse's mouth. It is a must-read for scholars and policymakers alike-a truly privileged observatory of how market forces at the micro level interact and contribute to macroeconomic outcomes. Two thumbs up.