Price setting in France: new evidence from survey data

This paper reports the results of a survey conducted by the Banque de France during Winter 2003-2004 to investigate the price-setting behavior of French manufacturing companies. Prices are found to adjust infrequently; the median firm modifies its price only once a year. Price reviews are more frequent than price changes; the median firm reviews its price quarterly. Firms are found to follow either time dependent, state-dependent or both pricing rules. Moreover, the chosen interval of price reviews depends on the probability that changes in the firms’ environment occur. Coordination failure and nominal contracts (either written or implicit) are the most important sources of price stickiness, while pricing thresholds and physical menu costs appear to be totally unimportant. Asymmetries in price stickiness are found to be different for cost shocks compared to demand shocks: prices are more rigid downward than upward for cost shocks, while the reverse is true for demand shocks. JEL Classification: E31, D40, L11Inflation persistence, price rigidity, price-setting behavior, survey data

Population, land and growth

This paper suggests a new explanation for changes in economic and population growth with a long run perspective, emphasizing the role of land in the development process. Starting from a pre-industrialization state called the "Malthusian regime&qot;, land and labor are the main production factors. The size of population is limited by the quantity of land available for households and by incomes. Technical progress driven by a "Boserupian effect" may push the economy towards a take-off regime. In this regime, capital accumulation begins and a "learning-by-doing" effect in production takes over from the "Boserupian effect". If this effect is strong enough, the economy can reach an "ultimate growth regime". In the different phases, land plays a crucial role.Endogenous fertility, land, endogenous growth.

Costs, demand, and producer price changes

We estimate an ordered probit model in order to explain the occurrence and magnitude of producer price changes in the French manufacturing sector. We use data consisting essentially of the Banque de France monthly business surveys, pooled over the years 1998-2005. Our results show that changes in the price of intermediate inputs are the main driver of producer price changes. Firms also appear to react significantly to changes in the producer price index of their industry. Variations in labor costs as well as in the production level also appear to increase the likelihood of a price change but their influence seems to be of a lesser importance. We also show that estimating an unconstrained dynamic model allows improving the estimation results as compared to those associated with a standard state-dependent model. Finally, our results point to an asymmetry in price adjustments. When they face a change in their costs, firms adjust their prices upward more often and more rapidly than they do it downward. JEL Classification: C23, C25, E31Price stickiness, frequency of price changes, price setting-behavior, survey data, ordered probit model

A theory of the optimal amount of public ownership of land

A major issue in reforming previously planned economies is the creation of assets markets. In this paper, it is argued that the mere characteristics of the assets to be privatized matter. Indeed, private ownership of land. It is the purpose of this paper to provide a theory of such rate. We make use of a two-sectors overlapping generations model economy with land and capital. We find a version of the second welfare theorem : the command optimum can be decentralized using one and only one instrument, i.e. the rate of land publicly held. We call such a rate the optimal rate of public ownership of land.

What Firms' Surveys Tell Us about Price-Setting Behavior in the Euro Area

This study investigates the pricing behavior of firms in the euro area on the basis of surveys conducted by nine Eurosystem national central banks, covering more than 11,000 firms. The results, consistent across countries, show that firms operate in monopolistically competitive markets, where prices are mostly set following markup rules and where price discrimination is common. Around one-third of firms follow mainly timedependent pricing rules, while two-thirds allow for elements of state dependence. The majority of the firms take into account both past and expected economic developments in their pricing decisions. Price reviews happen with a low frequency, of about one to three times per year in most countries, but prices are actually changed even less. Hence, price stickiness arises at both stages of the price-setting process and is mainly driven by customer relationships — explicit and implicit contracts — and coordination failure. Firms adjust prices asymmetrically in response to shocks: while cost shocks have a greater impact when prices have to be raised than when they have to be reduced, a fall in demand is more likely to induce a price change than an increase in demand

The pricing behaviour of firms in the euro area: new survey evidence

This study investigates the pricing behaviour of firms in the euro area on the basis of surveys conducted by nine Eurosystem national central banks, covering more than 11,000 firms. The results, robust across countries, show that firms operate in monopolistically competitive markets, where prices are mostly set following markup rules and where price discrimination is common. Around one-third of firms follow mainly time-dependent pricing rules while twothirds allow for elements of state-dependence. The majority of firms take into account past and expected economic developments in their pricing decisions. Price stickiness is mainly driven by customer relationships – explicit and implicit contracts – and coordination failure. Firms adjust prices asymmetrically in response to shocks: while cost shocks have a greater impact when prices have to be raised than when they have to be reduced, reductions in demand are more likely to induce a price change than increases in demand. JEL Classification: E30, D40Inflation persistence, nominal rigidity, price setting, real rigidity, survey data

Phonon dispersion and low energy anomaly in CaC6_6

We report measurements of phonon dispersion in CaC$_6$ using inelastic X-ray and neutron scattering. We find good overall agreement, particularly in the 50 meV energy region, between experimental data and first-principles density-functional-theory calculations. However, on the longitudinal dispersion along the $(1 1 1)$ axis of the rhombohedral representation, we find an unexpected anti-crossing with an additional longitudinal mode, at about 11 meV. At a comparable energy, we observe also unexpected intensity on the in-plane direction. These results resolve the previous incorrect assignment of a longitudinal phonon mode to a transverse mode in the same energy range. By calculating the electron susceptibility from first principles we show that this longitudinal excitation is unlikely to be due to a plasmon and consequently can probably be due to defects or vacancies present in the sample.Comment: Accepted for publication in Physical Review

Superconductivity in Li3Ca2C6 intercalated graphite

In this letter, we report the discovery of superconductivity in Li3Ca2C6. Several graphite intercalation compounds (GICs) with electron donors, are well known as superconductors. It is probably not astonishing, since it is generally admitted that low dimensionality promotes high superconducting transition temperatures. Superconductivity is lacking in pristine graphite, but after charging the graphene planes by intercalation, its electronic properties change considerably and superconducting behaviour can appear. Li3Ca2C6 is a ternary GIC, for which the intercalated sheets are very thick and poly-layered (five lithium layers and two calcium ones). It contains a great amount of metal (five metallic atoms for six carbon ones). Its critical temperature of 11.15 K is very close to that of CaC6 GIC (11.5 K). Both CaC6 and Li3Ca2C6 GICs possess currently the highest transition temperatures among all the GICs.Comment: 5 pages, 3 figure

What Firms' Surveys Tell Us about Price-Setting Behavior in the Euro Area

This study investigates the pricing behavior of firms in the euro area on the basis of surveys conducted by nine Eurosystem national central banks, covering more than 11,000 firms. The results, consistent across countries, show that firms operate in monopolistically competitive markets, where prices are mostly set following markup rules and where price discrimination is common. Around one-third of firms follow mainly timedependent pricing rules, while two-thirds allow for elements of state dependence. The majority of the firms take into account both past and expected economic developments in their pricing decisions. Price reviews happen with a low frequency, of about one to three times per year in most countries, but prices are actually changed even less. Hence, price stickiness arises at both stages of the price-setting process and is mainly driven by customer relationships — explicit and implicit contracts — and coordination failure. Firms adjust prices asymmetrically in response to shocks: while cost shocks have a greater impact when prices have to be raised than when they have to be reduced, a fall in demand is more likely to induce a price change than an increase in deman