The Cyclicality of Sales and Aggregate Price Flexibility
成果类型：
Article
署名作者：
Kryvtsov, Oleksiy; Vincent, Nicolas
署名单位：
Bank of Canada; Universite de Montreal; HEC Montreal
刊物名称：
REVIEW OF ECONOMIC STUDIES
ISSN/ISSBN：
0034-6527
DOI：
10.1093/restud/rdaa050
发表日期：
2021
页码：
334-377
关键词：
摘要：
Macroeconomists traditionally ignore temporary price markdowns (sales) under the assumption that they are unrelated to aggregate phenomena. We revisit this view. First, we provide robust evidence from the U.K. and U.S. CPI micro data that the frequency of sales is strongly countercyclical, as much as doubling during the Great Recession. Second, we build a general equilibrium model in which cyclical sales arise endogenously as retailers try to attract bargain hunters. The calibrated model fits well the business cycle co-movement of sales with consumption and hours worked, and the strong substitution between market work and shopping time documented in the time-use literature. The model predicts that after a monetary contraction, the heightened use of discounts by firms amplifies the fall in the aggregate price level, attenuating by a third the one-year response of real consumption.
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