Firms quicker to raise prices than cut them during high inflation, RBNZ research finds
Research from the Reserve Bank of New Zealand suggests that firms are faster to raise prices during inflation than they are to lower them when costs decrease. Chief economist Paul Conway noted that digital technology has made price adjustments more responsive to inflation expectations.
Why it matters
Understanding asymmetric pricing behavior is crucial for central banks to manage inflation expectations and set effective monetary policy.
New Reserve Bank research shows Kiwi firms have become more likely to increase prices during periods of high inflation and are less likely to cut them when costs fall.
Economic reporting based on official research findings from a central bank.
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